MinRes posts $904 million loss as Ellison exit drags on

[Ben Graham]

Mineral Resources (ASX: MIN) has plunged to a A$904 million ($588 million) annual loss, reversing a A$125 million ($114 million) profit the year before, as the debt-heavy iron ore and lithium producer struggles to convince investors it has a clear succession plan.

The Australian miner stumbled through a bruising year of governance scandals in 2024, capped by a corporate probe into managing director Chris Ellison’s business dealings. While shareholders seemed satisfied when Ellison agreed in November to step down within 12 to 18 months, many are now impatient with the lack of visible progress on finding a successor.

In a letter to shareholders, new chairman Malcolm Bundey acknowledged the uncertainty.

“The challenges and disappointments of the past year are clear. I acknowledge the negative headlines, regulatory scrutiny and the erosion of confidence. Our response is now driving meaningful change,” Bundey wrote.

Shares closed down 1.55% on Thursday at A$36.87 in Sydney, but remain up 6.2% year-to-date, giving MinRes a market value of nearly A$7.3 billion ($4.7 billion).

The investigation into Ellison found he had held an interest in Far East Equipment Holdings, a British Virgin Islands company that sold equipment to Crushing Services International before its 2006 acquisition by MinRes.

The board also confirmed related-party benefits flowed to Ellison’s associates, including rent payments to entities he held interests in, rent relief for companies tied to his daughter, and indirect financial arrangements involving her. While Ellison disclosed these dealings, directors concluded he failed to appreciate the importance of transparency.

Ellison, a New Zealand-born billionaire who left school at 15, has yet to set a firm departure date, and MinRes has given no indication it is actively searching for his replacement. Bundey’s comments suggested Ellison’s exit remains on track, though they left investors waiting for clarity.

“I appreciate that shareholders are looking for clarity on succession planning for … Chris Ellison. My focus as chair is on ensuring that Chris’ succession is robust and carefully planned,” he wrote.

Lithium price collapse

Beyond the leadership question, MinRes has been hit hard by a lithium price collapse that has forced writedowns and tighter cost controls. Prices have fallen 86% from their 2022 peak, though they have edged higher in recent weeks after a major Chinese mine shut down.

“We got the lithium price wrong, and our earnings and net debt levels have been greatly impacted,” Ellison conceded. “Our focus of late has been on cost and performance to ensure the business is set up through the cycle.”

Signs of recovery may be emerging. UBS Group AG this week lifted its spodumene price forecast by up to 32%, citing expectations of broader supply disruptions in China. It also raised its target for IGO shares by 20%. UBS now sees the lithium market “almost in deficit” by 2026, though it warned that idled capacity could return and unwind gains by 2027.