Embattled miner Mineral Resources has come to the defence of its balance sheet, after Fitch Ratings downgraded its credit rating to BB-, with a negative outlook.
Embattled miner Mineral Resources has come to the defence of its balance sheet, after Fitch Ratings downgraded its credit rating to BB-, with a negative outlook.
Fitch announced the downgrade overnight, citing factors including a depressed lithium price, corporate governance issues and high debt leverage as reasons for the move.
MinRes recently posted a $807 million half-year loss and had gross debt of $5.1 billion at the end of December; a figure boosted about $320 million by a re-evaluation of $US3.1 billion worth of bonds.
Fitch expects MinRes’s net leverage to grow to 7.3 times its earnings before interest, tax, depreciation and amortisation this financial year; up from 4.9 times last financial year.
It expects net leverage to remain above three times EBITDA through to the 2028 financial year.
In a statement, MinRes noted the downgrade brought Fitch in line with its Moody’s rating of Ba3, which has been in place since 2019.
The company also flagged its ability to cover the debt.
“MinRes has a covenant-light capital structure and significant liquidity, as well as a clear path to deleverage the balance sheet through earnings growth,” it said.
“As Onslow Iron ramps up to nameplate capacity [in the early part of the 2026 financial year], the low-cost project will generate significant cash flow for our iron ore and mining services divisions.
“It is important to note that the first US bonds do not mature until May 2027, and can be refinanced at par from May 2025.
“Going forward, MinRes remains committed to its long-term leverage target of two times EBITDA.”
The company's share price was down 1.3 per cent in early trade to $21.19, having yesterday closed below $22/share for the first time since 2020.
American investment giant BlackRock sold out of its place on the MinRes major shareholder register last week, moving on $133 million worth of stock on Friday, February 28.
BlackRock remains on the MinRes register, having bought back $42.9 million worth of stock the same day.
MinRes recently told the ASX it was among the most shorted stocks on the market.
The miner expects to achieve nameplate production of 35 million tonnes per annum at Onslow Iron in the first quarter of the 2026 financial year.
It is also undertaking $230 million worth of resurfacing and upgrade works on the $2.6 billion haul road, connecting the Onslow mine to the Port of Ashburton, after a series of truck rollovers.
