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Mineral Resources sees worst day in 16 yrs on production woes, higher costs

  • Wednesday, February 19, 2025
  • Source:ferro-alloys.com

  • Keywords:market, mining industry,mine,steel,iron ore,
[Fellow]The stock was the top loser on the benchmark ASX 200 index, which was down 0.7%.


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E-mail: weixin@ferro-alloys.com        Tel:+86 15343160065

【Ferro-alloys.com】: Shares of Mineral Resources (MinRes) plunged to their worst day in 16 years on Wednesday after the Australian miner cut its fiscal 2025 production volumes and raised costs for its Onslow iron project in Pilbara due to weather disruptions.

The company's shares fell as much as 22.1% to A$23.75, the lowest since late July 2020, and logged their biggest single-day decline since October 10, 2008. The stock was the top loser on the benchmark ASX 200 index, which was down 0.7%.

The miner trimmed its forecast for iron ore volumes to 8.8 to 9.3 metric tons (Mt) for financial year 2025 from 10.5- to 11.7 Mt estimated previously. It also hiked its free-on-board costs, or the charges incurred to transport iron-ore, to $60/ton-$70/ton from $58/t-$68/t.

"The cyclone (Sean) dropped an extraordinary amount of rain on parts of the Pilbara and the deluge was exacerbated days later by a low-pressure system that dumped more heavy rain inland. These weather events caused significant flooding that damaged parts of the Onslow Iron haul road," founder and managing director Chris Ellison said.

Record rainfall on Western Australia's Pilbara coastline as well as a slew of tropical cyclones have affected shipments for iron ore miners including Rio Tinto.

Late on Tuesday, MinRes reported a 55% drop in its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to A$302-million ($192.13-million), but still beat an estimate of A$205-million provided by Visible Alpha.

Analysts at Jefferies estimate the company's capital expenditure for fiscal year 2025 at A$2.1-billion, an increase of about A$340-million from their previous expectations.

"The medium-term downside risk presented from (MinRes's) elevated debt in an environment of falling iron ore, soft lithium, higher capex and lower lithium production prevents us from turning more constructive."

  • [Editor:Alakay]

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