Not selling MinRes mining services unit says Mike Grey, with Onslow staying in the black a white-hot focus

West Australian

26-06-2025

The 'crown jewel' of Mineral Resources is not for sale, according to the man that oversees the division, because keeping it could help the company's flagship mine turn a decent profit even if iron ore crashes below $US60 per tonne.
MinRes mining services chief executive Mike Grey shot down speculation a big chunk of the business unit he oversees could be flogged off to ease the company's swelling debt burden.
The speculation emerged following a note published by Morgan Stanley this week.
'There's no truth to it all, no truth,' Mr Grey told The West Australian.
Director of strategy, Tim Picton, chimed in to say the division – called CSI Mining Services – was the company's 'crown jewel'.
'You don't sell the crown jewel and mining services is the heart of our business and what makes us competitive against the majors,' Mr Picton said.
'We've got no plans to sell any of our assets, except the (mothballed) Yilgarn (iron ore complex).'
CSI is the mining services provider at MinRes' majority-owned iron ore and lithium mines, and is also contracted to other operations run by the likes of BHP, Rio Tinto and Gina Rinehart.
MinRes' $3.5 billion Onslow Iron project is arguably CSI's most important gig.
Onslow is the only mine in the MinRes stable that can generate the meaningful sums of cash required to pay down the company's $5.8 billion debt pile.
MinRes reckons its 57 per cent stake in Onslow can bring in annual earnings before interest, tax, depreciation and amortisation of $727 million when the iron ore spot price is $US90/t.
The steelmaking commodity is currently at about $US92/t with Australia's big four banks broadly pencilling in the price to fall to $US80/t by the end of the year.
MinRes predicts Onslow's break-even price is $US57/t.
Mr Picton said this estimate does not include the money raked in from mining services at Onslow, which would push the break-even price 'down a material amount'.
But all the estimates are contingent on Onslow Iron running smoothly, and so far, there have been numerous bumps along the road.
The biggest bump has been the performance of its haul road that links the Kens Bore mine to the Port of Ashburton.
MinRes is spending $230 million to fix and upgrade the road following cyclonic weather earlier this year and a spate of truck rollovers.
The company struggled to attract drivers to transport ore along the road and recently had to lower its driver experience requirements while boosting the pay on offer.
Mr Grey said those hiring struggles are now behind MinRes.
'The labour side has really stabilised across the supply chain recently which is really good,' he said.
'We're at our peak now with (truck) drivers.'
MinRes plans to roll out autonomous trucks with no drivers in the cabs during the latter half of next year.