Inside the Mineral Resources $140m mine camp with mini golf and cricket nets

Any other miner would have spent $50m on a mine camp. But at Mineral Resources, double dongas and putt putt are part of the Ellison culture that will outlast its outgoing managing director.

Mungala Resort at the Onslow Iron project in the Pilbara. Picture: Mineral Resources

Mineral Resources spared no expense on mine worker accommodation, from “love shacks” for coupled up employees to an 18-hole putt putt course, underlining just how difficult it will be for the miner to extract itself from the legacy of Chris Ellison.

The board is looking for Mr Ellison’s successor since deciding last year that his related party dealings and participation in an offshore tax scheme were the end of his MinRes leadership.

MinRes could have built the camp for about $55m, but instead opted to spend $140m.

Mr Ellison was nowhere to be seen on Thursday when the company officially opened the camp it has named Mungala Resort in a nod to traditional owners represented by the Robe River Kuruma Corporation.

And despite the parlous financial state the company now finds itself in, the “resort” was a source of corporate pride at one of the Pilbara’s most humbled iron ore producers.

Director of strategy, Tim Picton, said the 500-room site at Ken Bore’s mine that underpins the $3.5bn Onslow Iron project had paid for itself within a few months.

“It’s completely changed how a mining camp feels and turned it into a community that people like being at,” he said. “That means that you’ve got a happier, more productive, safer workforce, and it means your retention rate is much, much higher.”

MinRes also claims to have a long list of workers wanting to jump ship from its struggling lithium and other operations for life at Ken’s Bore.

FIFO workers break for golf on site. Picture: Mineral Resources

It has shed more than 1700 workers since the end of last financial year and is weighed down by a $5.4bn net debt pile.

Rooms feature queen-size beds, washing machines, private verandas and are three-times the size of a typical ‘donga’.

There are 23 couples who fly-in and out of Ken Bore’s on MinRes Air, the company airline.

Mr Ellison has also delivered on his promise to offer some of the cheapest childcare in Australia in a centre next to his headquarters in Perth.

The MinRes share price plunged in March after it revealed a first-half loss of $807m and admitted it would need to spend $230m repairing and upgrading the 150km-long haul road that connects the Ken’s Bore iron ore mine to port facilities at Onslow.

The Australian Securities and Investments Commission is investigating the governance implosion that erupted last year but apparently ran for decades unchecked.

Newcomer Malcolm Bundey take up his role as chair on July 1. Other board appointments are expected to follow after independent directors Jacqueline McGill, Susie Corlett and Denise McComish quit in April.

MinRes mining services boss Mike Grey, in charge of the Onslow Iron project, said it was starting to hit its straps.

Repairs and upgrades to the haul road were on track and on budget for a September quarter finish. MinRes is also in sight of its target production rate of 35 million tonnes a year.

“There’s no risk about that,” he said.

Inside the fully furnished rooms at Mungala. Picture: Mineral Resources

Onslow Iron faces a softening iron ore price. Fortunately, China’s Baowu Steel Group, the world’s largest steelmaker, is a partner in Onslow Iron and has been buying 75 per cent of the MinRes share of production plus taking its own share of about 18.7 per cent.

Mr Picton said MinRes remained confident of Baowu support – its top leaders visited Onslow Iron in recent weeks – and in Chinese demand more broadly.

“The iron ore price at about $US90 during the midst of a global trade war with tariffs on China shows that it’s incredibly resilient,” he said.

“We think that between $US90 and $US110 a tonne is where the iron ore price will float. If it got down to $US80, are we worried? Not at all because this project makes a lot of cash regardless.”

Meanwhile, the company mothballed its Bald Hill lithium mine in WA last year and slashed more than 500 jobs from the division.

“Those two mine are running better than they ever have before,” Mr Picton said of Wodgina and Mt Marion.

Dump truck driver Lisa Vines is happily embedded at Mungala Resort. Ms Vines, 59, left a 30-plus year career mainly in WA’s Department of Communities to join MinRes a couple of years ago.

“It’s the ClubMed of the Pilbara,” she said.

She is sorry to see Mr Ellison go when that day comes.

“He talks to you individually, and I’m just a truck driver. He comes down to our level. ‘Are you safe? Are you happy?’”

Brad Thompson travelled to the Pilbara as a guest of MinRes

Originally published as Inside the Mineral Resources $140m mine camp with mini golf and cricket nets