Mineral Resources appears to have implemented a strategy that assumes lithiumand iron ore prices stay at current levels for a short period only, suggests GoldmanSachs. At current commodity prices, GS estimates that all five of MinRes's mining assetsare free cash flow negative. Analyst Paul Young says the Ashburton project likely willonly be free cash flow positive sometime in the June half, assuming iron-ore pricesaverage US$95/ton and a production run rate of more than 20 million tons/year. "Ifcommodity prices decline further then we think MinRes may need to cut capex and opexfurther and potentially place Iron Valley and Mt Marion on care and maintenance," GSsays. It has a neutral call on MinRes's stock.
