11/08/2021 - 16:01

MIN outlines growth plan after big profit

11/08/2021 - 16:01

Bookmark

Save articles for future reference.

Mineral Resources managing director Chris Ellison said today he is extremely confident the miner will get the nod over rival exporters to expand its operations at Port Hedland.

MIN outlines growth plan after big profit
Chris Ellison plans two new iron ore export hubs.

Mineral Resources managing director Chris Ellison said today he is extremely confident the miner will get the nod over rival exporters to expand its operations at Port Hedland.

Mr Ellison also expects final approvals in the next few weeks for its planned 30 million tonnes per annum Ashburton hub, which plans to export iron ore though a new port near Onslow.

He hopes to develop an even larger export hub at Port Hedland’s South West Creek, subject to securing government approvals.

“We are awaiting the government to announce channel and port allocations,” he told a teleconference today

“We expect some announcements on that …..in the next month or two.

“Our level of confidence is extremely high.”

In response to Mr Ellison’s comments, the state government said it was keen to accommodate the export growth aspirations of all port proponents and maximize the efficiency of the port, which is also used by BHP and Roy Hill Holdings.

The Pilbara Ports Authority's review of Port Hedland’s development plan was due to be completed within coming months, a spokesperson said. 

“Discussions are commercial in confidence and we will not speculate on any future decisions,” they added.

Mr Ellison was speaking after announcing a big lift in the company’s profits and dividends for the year to June 2021.

Statutory net profit after tax was up 26 per cent to $1.27 billion, though this was affected by several one-off items.

A better guide to the company’s performance was the 230 per cent increase in underlying net profit after tax to $1.1 billion.

The company said its higher profit was underpinned by continued growth in its mining services segment, which increased its production volumes by 20 per cent.

It also benefited from record iron ore sales volumes (17.3 mt) and prices.

The company’s board has declared a final dividend of 175 cents per share, taking its full-year payout to 275 cents per share.

That’s up from 100 cents in the previous financial year.

Mr Ellison said FY21 was a year like no other, with the constant threat of COVID.

“I am proud to say that Mineral Resources has delivered a record year in terms of tonnes produced and shipped, revenue and profit reported, and dividends declared,” he said.

“The full-year result is the culmination of continued strong growth in our mining services division, which is our company’s heartbeat, and realises the rewards from our decision to build long-horizon businesses in iron ore and lithium.”

Mr Ellison said the outlook for Mineral Resources was positive, notwithstanding the impacts related to COVID and cost pressures creeping into the West Australian resources sector.

He commended the WA government for its success in managing COVID and keeping the WA economy open but urged governments to find a path forward.

“We need to find a way to safely bring people into WA,” he said.

The company is planning to start construction of its Ashburton hub next month, with first production by June 2023.

The development will be based on its Bungaroo South and Kumina deposits.

Mr Ellison said the Red Hill deposit, which MIN plans to buy from ASX-listed Red Hill Iron for $400 million, provided a further opportunity.

The planned South West Creek development is based on development of the Marillana and Opthalmia iron ore deposits.

Commenting on the group’s mothballed Wodgina lithium mine, Mr Ellison said it would only restart when MIN and its joint venture partner Albemarle Corporation had capacity to process the concentrate into lithium hydroxide.

MIN’s share price dipped slightly today to $60.31 compared to an all-time high of $63.40 two weeks ago.

All iron ore stocks have weakened over the past fortnight following a significant slide in iron ore prices.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options