Mineral Resources Limited (ASX: MIN) has announced a significant milestone in its Onslow Iron project, securing unconditional approval from the Foreign Investment Review Board (FIRB) for the sale of a 49 per cent interest in the project’s haul road.
The deal, struck with investment funds managed by Morgan Stanley Infrastructure Partners (MSIP), is set to generate total proceeds of $1.3 billion.
With all conditions precedent now satisfied, the transaction is expected to close within 15 business days.
Upon completion, MinRes will receive an upfront cash payment of $1.1 billion, with an additional $200 million in deferred consideration contingent on Onslow Iron achieving a 35 million wet metric tonnes per annum run rate for any quarter before June 30, 2026.
The Onslow Iron project has made substantial progress since its first ore shipment in May 2024, having exported over one million tonnes of iron ore to date.
Shipment volumes are increasing steadily, with 134,000 tonnes exported in July, 532,000 tonnes in August, and an expected 720,000 tonnes in September.
MinRes Managing Director Chris Ellison highlighted the significance of the partnership with MSIP, stating: “Our partnership with Morgan Stanley Infrastructure Partners will release $1.3 billion of value from the haul road, highlighting the quality of earnings that Onslow Iron is set to achieve.”
The company also announced cost-saving measures across its operations, including approximately $180 million in FY25 capital expenditure savings and $120 million in FY25 operational cost reductions.
These measures extend to the Lithium division, where operational changes include transitioning to a new roster system at the Mt Marion and Wodgina operations.
Despite these operational adjustments, MinRes has maintained its Lithium FY25 production guidance and Mining Services FY25 volume guidance.
The Onslow Iron project is on track to reach its nameplate capacity of 35 million tonnes per annum by June 2025, with the completion of the haul road expected in October 2024.
At current iron ore prices, MinRes anticipates that Onslow Iron operations will become cash flow positive from October 2024, even as the project continues to ramp up.
This development marks a significant step forward for Mineral Resources, demonstrating the company’s ability to unlock value from its assets and adapt to changing market conditions in the mining sector.
