Andrew Ellison-run miner collapses after drawing down $135m loan from MinRes
A mining company led by Chris Ellison's brother has collapsed after MinRes refused to extend more interest-free credit, despite holding a majority stake in the business.
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Mineral Resources and business deals involving members of managing director Chris Ellison’s family are back in the spotlight after the collapse of a company led by his younger brother.
Andrew Ellison-led Resource Development Group fell into voluntary administration on Monday after having drawn down a $135m loan from MinRes, which declined to provide more interest-free credit.
MinRes, a secured creditor that holds a 64 per cent stake in RDG, said it was assessing the carrying value of RDG’s assets and expected to incur a non-cash impairment in its 2025-26 results.
The call to cut off credit to RDG comes as new MinRes chair Malcolm Bundey grapples with a rehabilitation mission and with MinRes weighed down by its own $5.4bn net debt pile.
“We will work constructively with the administrators throughout the process in the best interest of MinRes shareholders, and will advise if there are any material developments,” Mr Bundey said on Monday.
The MinRes share price fell almost 6.5 per cent to $30.24 on Monday but is up from $24.46 since July8 when Mr Bundey indicated the company was reconsidering its plan to part ways with Chris Ellison over his involvement in an offshore tax scheme, misuse of company resources and related-party dealings.
McGrathNicol said its administrators had taken control of RDG’s operations and intended to continue trading on a “business as usual” basis while embarking on a sale and/or recapitalisation process.
“RDG’s majority shareholder and secured creditor, MinRes, has offered to provide funding to the administrators to support the continuation of trade through this period,” McGrathNicol said.
RDG’s assets include the Lucky Bay garnet mine near Kalbarri in WA, run by MinRes subsidiary CSI Mining Services.
RDG’s chairman is MinRes chief financial officer Mark Wilson and MinRes mining services boss Mike Grey is also a director. Its headquarters is just doors away from the MinRes base in Osborne Park in Perth.
MinRes, as RDG’s parent company, provided the $135m loan to complete construction and development of the Lucky Bay project, which has never reached anywhere near nameplate capacity. RDG’s half-year accounts from February indicate the loan was drawn down to $130.7m and that MinRes was not charging interest. RDG, which finished the half-year with just $5.9m in the bank, said at the time that MinRes had agreed to delay repayment of the first loan instalment from June to September.
Andrew Ellison faced tough questions about the Lucky Bay mine and his near $1m a year pay packet at the RDG annual general meeting last November. RDG has since run foul of WA authorities alleging part of the Shark Bay plant was built without proper approvals.
Originally published as Andrew Ellison-run miner collapses after drawing down $135m loan from MinRes
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