https://thewest.com.au/business/mining/mineral-resources-digs-in-...

https://thewest.com.au/business/min...nge-as-tax-boon-helps-profit-along-c-13679558

Mineral Resources digs in on lithium despite major price plunge as tax boon helps profit along
Simone Grogan and Adrian RausoThe West Australian
Wed, 21 February 2024 6:02PM




Mineral Resources managing director Chris Ellison said iron ore had performed well during the period. Kelsey ReidCredit: Kelsey Reid/The West Australian

Iron ore and a tax benefit from a rejig of a joint venture with Albemarle has helped boost Mineral Resources’ bottom line for the half year as lithium prices took a beating.

The Chris Ellison-led miner lifted shipments from its Mt Marion and Wodgina lithium mines in the December half-year but earnings from the battery metal plunged as average prices for the company’s spodumene concentrate crashed 69 per cent.
Mr Ellison said costs were falling at both sites but that further cuts to align with “depressed” lithium prices would be a priority for the remainder of the year.

MinRes’ net profit rose 33 per cent to $518m on the prior corresponding period thanks to a $43.9m tax benefit on its restructured MARBL joint venture with US lithium giant Albemarle last year.

Underlying profit fell 28 per cent to $674.9m before interest, tax, depreciation and amortisation.

The miner also got started on shipping product from its new lithium buy Bald Hill during the half, which it acquired in November 2023. About 18,000t were shipped at a soft $US979 a tonne.
“We continued to invest in the Lithium business, with the acquisition of a third hard rock mine, Bald Hill, and the expansion of our footprint in Western Australia through strategic investments in the world’s most prospective ground,” Mr Ellison said.

The miner also maintained it was also on track to have first ore on ship from its newest iron ore mine, Onslow, by the middle of this year.
Mr Ellison said iron ore had been the group’s “star performer” despite haulage problems during the period, shipping an improved 8.7 wet metric tonnes to drive a 37 per cent lift in revenue taking underlying EBITDA to $266.2m.
MinRes has also said it plans to make a final investment decision on a gas processing facility provided the State Government will agree to a partial export agreement.

Meanwhile MinRes is reportedly pulling the trigger to offload its stake in takeover target Azure Minerals, a month after MinRes chief financial officer Mark Wilson said the miner would liquidate its holding.
Chilean giant SQM and Mrs Rinehart’s Hancock Prospecting joined hands last month to lob an all-cash $3.70-a-share scheme of arrangement proposal, which, if not successful, will trigger an off-market takeover priced at $3.65 each.

MinRes joined the takeover tussle for Azure in November by quickly amassing a 13.6 per cent stake.
But tumbling lithium prices and MinRes taking chunky stakes in a host of juniors, most recently Kali Metals, likely forced the miner to cut the chord and instead boost its warchest amid the current battery minerals downturn.

Azure shares last changed hands at $3.61 apiece and MinRes is said to be happy to cash out at $3.46.
At a $3.46 sale price MinRes would realise a circa $13m loss on its investment.

Shares in MinRes last changed hands at $59.09.