Chris Ellison heralds balance sheet ‘transformation’ with miner back in black thanks to Onslow, lithium boost

Steady iron ore prices, a lithium revival and a few favourable tax events have come in clutch for Mineral Resources as the Chris Ellison-steered miner tries to nurse its balance sheet, and image, to full health. Mr Ellison — who was supposed to be out the door by the middle of this year — on Friday said the company he founded had “delivered the strongest six-month period in the company’s history”. The miner’s bottom line climbed back to a statutory profit of $573 million for the six months to the end of December versus a $807m loss for the same period last year, and cracked a revenue record of $3.1 billion. That was aided by the new Onslow Iron operation striking and holding annual nameplate capacity of 35 million tonnes since August, with prices for a tonne rising 12 per cent on the prior period to an average $US91 alongside higher volumes. Despite booking an additional $182m in lithium earnings and cranking up output, MinRes has resisted the urge to hit restart on the idled Bald Hill mine, which has been speculated as a possibility given the battery mineral’s recent price revival. “We just want a bit more evidence that the demand out there is sustainable. I don’t want to go turning that on and keeping it running for a short period of time,” Mr Ellison told analysts on Friday. Litihum peer PLS on Thursday took a different view, and made the call to restart the Ngungaju plant but only after securing a contract with China’s Canmax that baked in a $US1000/t price floor for its product as a hedge against the volatile commodity turning again. Mr Ellison was not keen on structuring a similar deal with customers, indicating he wanted to keep the miner’s lithium cargoes exposed to higher spot prices. “We averaged around $US970 a tonne during the half and prices continue to rise. We sold a cargo for $US2500 in recent weeks,” he said earlier in the call. The managing director was equally optimistic on iron ore, despite acknowledging there was a “bit of a drive on” between China Mineral Resources Group and the Pilbara majors over pricing. “We still see good demand. I keep reading in the paper, the stockpiles are up, or something’s expected to downturn, but we seem to be sitting in there around that sort of $US95 to $US105 range, and it feels like it’s going to hang in there for some time to come.” MinRes signed a deal to sell 30 per cent of its stakes in the Wodgina and Mt Marion lithium mines to South Korea’s POSCO for $1.2b in November, with proceeds of the sale set to go towards clearing off a substantial chunk of the miner’s debt in the second half. Its total owings stood at $4.9b by the end of December. The mining services business — which services the ramping up Onslow operation and external customers — was talked up as a strong performer over the half, delivering a 29 per cent lift in underlying earnings. MinRes booked a $134m tax gain after offloading its stake in the Onslow Haul Road — which the miner said was spared any damage during a recent cyclone — and $72m in non-cash gains on favourable currency exchanges. Investors won’t see an interim dividend as the miner reinforced its focus on “fortifying the balance sheet”. Mr Ellison said the result was driven by “operational performance rather than extraordinary commodity prices”, and validated decisions the business had made in recent years. “The transformation of this business is now evident with Onslow Iron at nameplate capacity,” he said, adding that its balance sheet shift had also begun after bringing down net debt by $471m during the half. Both Mr Ellison and new chair Malcolm Bundey acknowledged the recent passing of former strategy director and Labor identity Tim Picton. “Tim’s brilliant strategic mind, drive and work ethic left a legacy at our company. He is deeply missed by his colleagues and our thoughts remain with Tim’s family,” Mr Ellison said. The MinRes founder had been expected to step down from the helm of the company by the the middle of this year amid a series of scandals involving tax evasion and misuse of company resources. However, the Kiwi mining entrepreneur may not be going anywhere for some time after Mr Bundey said at an annual meeting last year that Mr Ellison’s exit should not be rushed “to meet an arbitrary deadline”. Elsewhere on the governance front, MinRes disclosed that two companies controlled by Mr Ellison’s daughter were competing in the tender process for draft survey and shipping agent works. Propel Marine Pty Ltd and Ship Agency Services Pty Ltd were paid $1.7m for their services linked to port operations during the half, according to the ASX update. “During the first half of FY26, the group progressed two separate tender processes, both overseen by the ethics and governance committee and both without any involvement of the MD,” its half-year report read. “All participants are being assessed against defined service levels and capability. Both tender processes are ongoing and are expected to be finalised by 30 June 2026.” MinRes shares were up 2.3 per cent, with the stock more than doubling what it was this time last year off the back of relatively stable iron ore prices and a lithium resurgence.