Mineral Resources (MinRes) will realise $1.3 billion of value for a 49 per cent interest in its Onslow Iron haul road to Morgan Stanley Infrastructure Partners (MSIP).
The Foreign Investment Review Board (FIRB) has given its approval to the transaction, meaning all conditions have now been satisfied. The deal is set to be completed within 15 business days.
Upon completion, MinRes will receive $1.1 billion in upfront cash from MSIP, while an additional $200 million will be paid if Onslow Iron achieves a production rate of 35 million wet metric tonnes per annum by June 2026.
“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,” MinRes managing director Chris Ellison said.
The sale will also allow MinRes to cancel its $US750 million undrawn bridge facility.
The Onslow Iron project has already shipped over one million tonnes of iron ore since first ore on ship was achieved in May 2024, with shipments expected to ramp up further.
There was 132,000 tonnes exported in July 2024, 532,000 tonnes in August 2024 and 720,000 tonnes expected to be shipped this month.
Onslow Iron is on track for operational completion by October 2024, with MinRes anticipating cash flow positive operations from the same month.
The haul road’s stable earnings are expected to provide long-term value.
“Importantly, under this unique partnership, MinRes maintains majority exposure to the stable earnings that the haul road will deliver over the project’s life,” Ellison said.
In response to market conditions, MinRes is also implementing cost-saving measures, including $180 million in capital expenditure reductions and $120 million in operational cost savings for the 2024–25 financial year.
This includes a reduction in operational headcount across MinRes’ lithium operations. This will see staff transition from a two weeks on, two weeks off roster to a two weeks on, one week off roster.