Mineral Resources to take control of failed miner run by Chris Ellison’s brother
Chris Ellison-led Mineral Resources is set to forgo a $145m loan in taking control of a failed company run by his younger sibling.
Mineral Resources is set to take control of a failed company that was led by the younger brother of managing director Chris Ellison as the fallout continues from a series of governance scandals and questionable deals involving related parties.
Andrew Ellison-led Resources Development Group collapsed last month after MinRes cut off credit. The latest documents issued by administrators McGrathNicol confirm MinRes was by far the biggest creditor and had loaned the company more than $145m.
McGrathNicol has recommended creditors vote in favour of a MinRes proposal to take control of RDG and its assets and in return cancel the loan and a separate line of credit to pay administration costs that together total $161.5m. MinRes has also agreed to pay all employee claims and all non-related party creditor claims.
The heavily intertwined relationship between the two companies, including sharing office space, was one of the related party deals that sparked internal and external investigations at MinRes.
MinRes, which owned a 64 per cent stake in RDG, rejected a RDG request for more interest-free credit in July. The rejection came as new MinRes chairman Malcolm Bundey embarked on a mission to reset his board and restore the company’s governance reputation.
The McGrathNicol report to creditors said most RDG workers had been retained to date to continue operating the company’s Lucky Bay garnet mine near Kalbarri in WA.
However, the report noted Andrew Ellison was made redundant on August 4 and indicated he would only receive $2000 for unpaid wages and superannuation as an excluded creditor.
Andrew Ellison sat on the board of RDG alongside MinRes chief financial officer Mark Wilson and MinRes mining services boss Mike Grey.
Andrew Ellison’s RDG remuneration increased by more than $400,000 to almost $950,107 in 2024-25 despite the poor performance of the Lucky Bay mine.
McGrathNicol said it considered whether there any been any breaches of director duties and found no evidence of any wrongdoing.
MinRes is due to report its full-year results on Thursday after a nightmare 12 months marked by tax evasion and other scandals involving Chris Ellison, an ongoing Australian Investments and Securities Commission investigation, commodity price weakness, mine closures, job cuts and soaring debt. And it is caught up in a legal battle with a WA government port authority over unpaid levies that also involves US oil and gas giant Chevron.
The MinRes share price fell about 5 per cent to $35.08 on Tuesday but has rallied strongly from $14.40 in April.
A MinRes spokesman confirmed it has submitted a proposal to the administrators to acquire the shares in RDG and its subsidiary companies as part of a deal that covered off on the secured debt owed to MinRes.
“The proposal would ensure that employees and eligible creditors are paid in full and that operations would continue during the acquisition process,” the MinRes spokesman said.
The MinRes proposal will be put to a vote at the second meeting of RDG creditors on September 1.
Originally published as Mineral Resources to take control of failed miner run by Chris Ellison’s brother
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