Mineral Resources slumps to massive loss as woes continue

His board backs him to the hilt, Chris Ellison says, while telling analysts MinRes is primed for strong cash flow growth. Meanwhile, his stake plunged $142m in value.

Mineral Resources’ Wodgina lithium project in the Pilbara Region of Western Australia.

Mineral Resources owns what might be “the best mining services company on the planet”, and the issues afflicting its newly finished iron ore haul road are “not that big a deal”, managing director Chris Ellison said as $142m got wiped from the value of his shares.

He also said on Wednesday that the company was primed for strong growth in cash flows which would significantly deleverage its balance sheet in coming years.

Investors sent MinRes shares tumbling 20.7 per cent to $24.18 on Wednesday after the company posted a shock first-half loss. The stock hit a 12-month low of $23.75 during intraday trade. Mr Ellison, who remains the biggest shareholder, had $142m wiped from the value of his 11.5 per cent stake, which is now worth $546m.

Mr Ellison, who was presenting to analysts, also declared the controversy around his misuse of company resources – the company last week said he had paid a $3.79m penalty for it – was over.

Perth-headquartered MinRes on Tuesday reported a first half net loss of $807m compared to net profit after tax of $530m for the same period last year, and revealed it needed to resurface with asphalt the entire length of a 150 kilometre-long iron ore haul road it only recently “finished” building.

The financial result included a $352m post-tax impairment on its mothballed Bald Hill lithium mine and a $232m foreign exchange hit.

Mr Ellison said on Wednesday that regarding the resurfacing of the Onslow haul road, that would result in “a minuscule three million tonnes” of full-year impact to what the road would carry.

“It’s not a big deal, trucks are running and life is still going on,’’ he said.

Mr Ellison said the Onslow iron ore operation itself was cash flow positive and “these cash flows coming out of this business are going to be substantial moving forward for a long, long time and they’re going to help us deleverage the balance sheet’’.

“We’re also primed to profit from the lithium assets as we see the MinRes mines reducing their costs.’’

Mr Ellison over the past year has brazened out the controversy over issues such as tax evasion and dubious third party deals he was tied up in, and on Wednesday said the issue was closed.

“For me personally, the issues that we’ve faced over the past six months, we’re done on them, they are behind me, they’re behind the business, the board has provided clarity on the market where it stands, I don’t think we could be any more clearer,’’ he said.

“They’re backing me to move the business forward and the board and I are clearly in lockstep, our focus is on creating value for our shareholders alone.’’

Mineral Resources managing director Chris Ellison says the board is behind him.

Mr Ellison said the company’s mining services division delivered record EBITDA of nearly $300m which was an outstanding result and the business would double between 2024 and 2026.

Mr Ellison said there was a lot of negative talk around the mining services business which was annoying.

“But is this possibly the best mining services business on the planet? And it’s got phenomenal growth ahead of it,’’ he said.

MinRes also on Tuesday slashed full-year guidance on iron ore shipments to 8.8 million to 9.3 million tonnes, blaming cyclone activity and the damage to the haul road.

MinRes said last week Mr Ellison would be replaced as managing director sometime before the end of April 2026 in line with the leadership shake-up it announced last November

Originally published as Mineral Resources slumps to massive loss as woes continue