Chris Ellison says it’s the “sh**tiest time” to be the boss of Mineral Resources, proclaiming “no one” is making money from lithium and warned of a bigger Perth workforce cull than previously expected.A penny-pinching MinRes is also putting expansion projects on ice and has decided not to give shareholders a final dividend for the first time in 11 years.Shares in MinRes have been hammered, down 10.50 per cent in early trade on Thursday, wiping out over $100 million of Mr Ellison’s paper wealth.It comes less than a month after MinRes told a big chunk of the white-collar workforce at its plush Osborne Park headquarters that their services were no longer required.The number of job losses was at the time thought to number around 100, but Mr Ellison revealed the situation is more dire than first thought.“We’ve moved about 140 people out of the Perth office, so there’s going to be a downturn in headcount between now and Christmas,” he told investors and analysts on Thursday morning.“I mean, this is the sh**tiest time to be the manging director of the company. You’ve got to really carve the costs out of everything you’re doing.”There was also an ominous statement that more pain may be on the way.UraniumPacker lambasts Rio for ‘crucifying’ investors in ERA buyoutSimone Grogan exclusiveMiningAlbemarle sells lithium for $US870 per tonne: sourcesAdrian Rauso“You look at every single person, we’re doing that, we’re throwing everything off the deck just to make sure we conserve cash,” he said.Mr Ellison, and ardent critic of employees working from home, said he does not want his people even leaving the office for coffee.“I want to hold them captive all day long, I don’t want them to walk down the road for a cup of coffee,” he said.“We kind of figured out a few years ago how much that costs, wandering out around lunchtime.”He was speaking after MinRes late on Wednesday lodged its 2024 financial year accounts, outlining a net profit figure of $114 million, down from $244m for the prior period. This was despite revenue rising 10 per cent to $5.3 billion.Margins were whacked by weaker lithium prices. Underlying earnings from lithium were $917m lower than FY2023 and Mr Ellison conceded his MinRes was losing money in the current market, but claimed everyone else is as well.“I mean, just for the record, no one is making money in this market . . . let’s be really, really clear on that there’s no lithium companies making money,” he said.“We’re just battering down for the downturn while we feel like we’re dragging our feet along the bottom at the moment.”Analysts estimate the huge Greenbushes lithium mine in WA’s South-West would still be profitable even if prices for spodumene concentrate fell to about $US420 a tonne, about half the current price of the commodity.MinRes’ cash pile was reduced by $471m over the year to June 30. Its net debt has ballooned from $1.9b to $4.4b.The cash drain was exacerbated by a $1b extra spent to develop the Onslow Iron project — which shipped first iron ore in May on schedule and on budget.Onslow currently has a nameplate capacity of 35 million tonnes per annum but MinRes had outlined plans to step up to 50mtpa, which have now been pushed to the right.Elsewhere on the iron ore front MinRes booked a $90m impairment on its Yilgarn hub, writing the value down to nil.In June the company announced it would cease shipments from Yilgarn by the end of this year in a bombshell move that impacted about 900 jobs.MinRes had already made a $311m impairment on Yilgarn in FY2023, on top of a $240m write-down for its Utah Point iron ore hub.“Given the stubborn lithium price and our remaining investment in Onslow Iron, we will continue to take a conservative approach during FY25, deferring expansion projects and focusing on cost reduction and cash preservation,” Mr Ellison said in MinRes’ ASX announcement released on Wednesday.“This approach was reflected by the Board’s decision to not declare a final dividend for FY24.”MinRes shareholders received a 70 cent per share dividend the same time last year.Mr Ellison told shareholders to hang in there despite the “tough market”.“It’s nothing we need to panic about, you just need to close your eyes and go, we’re in a downturn,” he said.“No one’s making money.”MinRes Air — the company’s in-house airline to transport its workers direct to site — is still taking to the skies despite the earnings turbulence.Mr Ellison said the business division now has 640 people on its payroll and MinRes will save “tens of millions of dollars” from being able to move its people more efficiently.A revelation this week that MinRes encourages the shippers that transport the company’s iron ore to use a shipping agent owned by Mr Ellison’s daughter was also touched on.The MinRes boss said he has “nothing to do” with the selection of the company’s shipping agent and poured cold water on the idea the contract should be put up for competitive tender again, pointing to what his other WA iron ore rivals do.“There’s two iron ore companies out there that have had the same ship agency services working for them from inception to date, there’s another one that’s had them over 21 years.
From The Western Australian Newspaper
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