Is Mineral Resources Limited on way to Regain Its lost glory?
With the POSCO deal highlighting the strength of its lithium portfolio, is Mineral Resources now on the verge of a major shift in its long-term trajectory?
Mineral Resources Limited (ASX: MIN)
is entering a new stage of growth as it builds up its position in iron ore, lithium and mining services across Western Australia.
The biggest update came on 12 November when it announced a major binding deal with POSCO Holdings to set up a new joint venture for the lithium business where POSCO is taking 30% of lithium unit for US$765 million which basically values the company’s 50% share in Wodgina and Mt Marion at around $3.9 billion.
This deal gives POSCO an indirect 15 percent stake in each mine while MinRes retains 70 percent ownership of the new JV along with its operating role.
Through this partnership POSCO will get its share of spodumene concentrate which helps them in their downstream battery materials plans and MinRes said the money from the deal will be used to repay some debt, make the balance sheet stronger and get ready for the next growth phase.
The company had a record start to the year with iron ore shipments of 11.4 million tonnes on a 100% basis and the biggest performer was Onslow Iron which reached its full 35Mtpa run rate between August and October.
In the quarter, 8.6 million tonnes were shipped from Onslow, which is 50% higher than Q4 and the company is now set to receive a $200 million contingent payment from Morgan Stanley Infrastructure Partners.
Financially the company stayed stable with $1.1 billion in liquidity and net debt sitting at $5.4 billion even though around $400 million in capex was spent early in the year.
The company also refinanced its US$700 million notes, bringing down the interest costs and pushing the maturity to 2031 which helps in a higher interest rate environment.
The POSCO deal is expected to finish in the first half of 2026 and will give a big liquidity boost while still keeping MinRes heavily exposed to the long-term upside in lithium.
Mineral Resources has set up a pretty ambitious path with its assets and looks in a good position to deliver another year of growth in FY26.
(Source: Company Reports)
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