Heavily indebted Mineral Resources (ASX:MIN) is slashing worker numbers and conditions at its WA mines and businesses as it receives FIRB approval to sell a 49% stake in a dedicated iron ore haul road, pocketing $1.1 billion from US investors.
The sale of the stake in the iron ore haul road has been in progress for a couple of months, with the company and its buyer, a fund associated with US bank Morgan Stanley.
MinRes stated on Tuesday night in a late filing with the ASX that approval for the sale had been given, and the deal would settle in 15 days — around September 15.
Another $200 million will be held in escrow until the iron ore project reaches a capacity of 35 million tonnes a year, which is expected by June 2026.
MinRes mentioned in the statement that more than a million tonnes of iron ore had been shipped from the Onslow Iron mine in central WA, and it expects the project to start generating cash from October onwards.
The Financial Review reported this week that MinRes had experienced two fully loaded iron ore road trains overturn on the haul road in the past three weeks.
In the same filing, MinRes updated the market on its cost-cutting plans as it battles the downturn in lithium and iron ore prices and activity.
MinRes said in Tuesday evening’s statement that around $300 million in capital expenditure and cost savings had been identified. This includes $180 million in 2024–25 capital expenditure savings and $120 million in operational cost savings, including in the lithium division.
"Cost savings in lithium include a reduction to operational headcount by transitioning to a two-weeks-on, one-week-off roster (from a two-weeks-on, two-weeks-off roster) at the Mt Marion and Wodgina operations," MinRes said.
Employees have been notified, and these changes will take effect over the next four to six weeks.
"There is no change to the lithium FY25 production guidance or mining services FY25 volume guidance as a result of these operational changes," the company added.
The changes will see workers at the two lithium mines in WA having to spend more time on site or opt for redundancy, as the indebted miner looks to slash costs.
About 800 workers will be affected by the rosters shifting from two weeks on, two weeks off, to two weeks on, one week off.
MinRes reported a 79% drop in underlying post-tax profit for the year ending in June, making just $158 million compared to $769 million the year before.
The slump comes even as overall revenue grew 10% to just under $5.3 billion.
There’s no final dividend, and the company’s debt ballooned to $4.4 billion by June this year, up from $1.89 billion in June 2023. Proceeds from the sale of the stake in the haul road will be used to reduce debt.
The shares fell 0.36% to $30.29 on Tuesday, the lowest close in more than a year.
