Mineral Resources Limited

Ladies and gentlemen, thank you for standing by and welcome to Mineral Resources investor call and presentation for the half year 2021 financial results. I'll shortly hand over to Chris Allison, Managing Director of Mineral Resources. Please be advised that today's call is being recorded and the presentation contains forecasts and forward-looking information. You should carefully read the disclaimer at the back of the presentation. A copy of the presentation and a transcript of this call will be posted to Mineral Resources website under the new section at mineralresources.com.au. At the end of the managing director's address, there will be an opportunity for institutional investors, analysts and media to verbally ask questions. If you wish to ask a question via the phone, you will need to press the star key followed by the number one on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the Ask a Question box. I will now hand over to Chris Allison.

Thank you. Thanks, everyone. Good morning. Welcome. This is the Mineral Resources half-year result. If you're dialled in for that, you're in the right place. I'm Chris Allison. I'm going to be joined by Mark Wilson, who's going to run us through the financials. We've had another fairly solid year. We've been able to follow on from our results from last year. It's got better, solid, no surprises, and probably almost predictable, but the business is operating extremely well. We've continued to manage through COVID. I mean, it's still out there in the world. I mean, it's something that we work on every day to make sure that our people are safe and well and healthy. Over the next few minutes, I'm going to tell you where we've been over the past six months. I'll talk about the performance of the business. We'll have a look at where we're going over the next three years, where we're going to take the business, and we're going to give some guidance around production and opportunities towards the end. As I said earlier, Mark will come in and he'll walk us through the financials. And if we've got any time left at the end, we'll have some Q&A. Highlights for the year. So far, we've survived these uncertain times. We've thrived, in fact. We've done incredibly well. Revenue's up 55%. Our first half EBITDA is almost equivalent to the whole of last year. and we're going to pay a dividend of $1 a share to keep our track record intact. The mining services continues to grow at its good, if not better than its normal growth path. We're up 23% on volume, and we're up 37% on EBITDA. We're commissioning three plants right now, three crushing plants, all going well there. just over 31 million tonnes of capacity. Commodities have performed incredibly well in the face of a number of challenges that that business has had to face this year. Control of costs has been a highlight. Costs are extremely well managed. We've invested heavily in iron ore over the last few years. We're reaping the benefits of that. Production's up 38%. Lithium. Pricing, as we all know, is not great. We've been in a very flat market. The Mount Marion mine site has continued to run extremely well. Again, cost control has been another highlight and being able to pull the cost down. Probably the only spod producer out there that's running a mine at full production plus and We've been able to pull the cost down substantially and the chemitin hydroxide plants progressing very well in light of the fact they've got a lot of challenges still around this COVID. Sustainability, another outstanding result. Credit to the staff and everyone in the business on these sort of results. We've kept the LTI rate at zero, which is almost unheard of in a business like ours. The TRIFA is down below three, which is our target. We're down at two and a three-quarter mark. While all that's been going on, we've added 800 new people to the business. So to be able to bring them in and make sure that they've got the culture and make sure that they understand how important the wellbeing and safety of our people is, is always a challenge. And to be able to bring those statistics back to the level they're at now, we'd be one of the few that's achieved that. We've put a lot more... focus on our well-being of our people around mental health as well. It's another area that we're growing and I think we're seeing a lot of benefits out of that, making sure that the people know that they're cared for and their health and their state of mind is incredibly important, particularly in times like we're in now with all of the different challenges that are getting around Just in Australia with bushfires that keep coming and going and the COVID and luckily we had a flood to put the bushfires out, but I'm not sure what we're going to face next month. I mean, trying to keep our open pits running and trucks on the road while all that goes on has been quite challenging. Sustainability performance, again, in terms of our people, new apprentice intake this year, the best we've had so far. We've got 16 were brought in, so we've got 54 in total. Incredibly important to make sure that we've got a workforce for the future. People are becoming the major focus in the mining industry and making sure that we've got good quality people that can deliver is important. Trainees and graduates, our intake is around 72 people. Our focus on supporting the community and issues out there, we've got 40 charities that we're supporting sitting around health, wellbeing, education, employment. Our spend in WA, over half a billion dollars, tax paid over 400 million. We've committed to zero emissions by 2050 at the latest. Realistically, I think we're going to achieve it a lot sooner than that. We've developed a roadmap on how we're going to get there. We've got some issues out there we're yet to have technology to be able to solve, but We'll keep delivering at least twice a year on a roadmap on how we're going to progress through to achieve that result. It's easy to be able to stand here and say we're going to do it, but more importantly, it's how we're going to do it and how quickly we can get there. emissions control is to simply try and eliminate diesel. It's the worst pollutant that we have in our business so we've been working on that over the last four years. We've made some good results. Our first step is to get rid of that by using solar power, wind power We're going to use natural gas, LNG, so it's going to be a progression of being able to reduce the damage that we're doing, getting right through to zero. As I said, I think we can, with the focus worldwide now, I think we're going to have better technology and better innovation to be able to bring that on a lot quicker. Business remains in incredibly good shape, great balance sheet. We've got plenty of firepower, and more importantly, we've got some extremely good management around that. So I'll pass over to Mark to let him walk you through that.

Thanks, Chris. Good morning. It's a pleasure to be here to walk you through the interim results for the group for the half. The numbers we've released this morning, I believe, reflect another strong half of operating performance across each of our businesses. I also believe they show the benefit of our commitment to reinvest for future growth. Starting with underlying profitability. Pleased to report the group has delivered record underlying profitability for the half for EBITDA of $763 million and net profit after tax of $430 million. And those results have been achieved. They don't include unrealised gains of over $160 million sitting in foreign exchange and in the value of our listed investments. Full reconciliation of that is in the appendix. Those items are non-cash, I emphasise. As Chris said, the EBITDA result is broadly in line with what we delivered over the previous 12 months, so a very strong result, and it's come out of strong contributions of each of the mining services and commodities businesses. As Chris said, revenue is up 55% and the underlying EBITDA is up 131% on the prior corresponding period. Appreciation amortisation, generally flat, aligned with the growth of the business. Effective tax rates back to 30%, as we'd foreshadowed. And as Chris said, the board has declared a fully franked dividend of $1 a share. And that represents a payout ratio slightly less than half of net profit after tax. A year ago, we reported underlying EBITDA of $330 million. And this next chart shows the build to this current result. You can see from it the clear driver has been the increase in the iron ore price over that period. But the point I want to make is that this half is not just about the iron ore price. What we've seen is strong margins being maintained through the business, particularly in the mining services business. We've seen great cost control throughout the business. In very difficult circumstances, a lot of cost pressure is starting to emerge in the business and the commodities costs generally perform extremely well. Volumes are up across each of mining services and commodities. And if you were to exclude the impact of the iron ore price movement, the business underlying profitability is still up 25% year on year or half on half. In terms of our cash flow over the period, key impact has been working capital, a deterioration of $108 million. A major driver for that has been increase in trade receivables, $178 million. That balance started to increase towards the end of the half as volume started to increase, shipping volume started to increase, and the iron ore price started to increase. And I would expect that balance to reduce over this coming half. Over the period towards the end of the period, we moved to respond to the federal government initiative to ensure fair payment terms for small business. We've taken steps to implement change in our system to ensure that the small businesses that supply us, they represent about two thirds of our suppliers, are paid within 30 days. Those changes won't have a material impact on our working capital position. Other drivers on Cash flow through the period have been capex, which I'll talk about shortly, and tax. At the end of the period, we paid $322 million to the tax office for the final payment on Wajana profit, making the total payments paid in respect... ..tax payments paid in respect to that transaction just over $410 million. In terms of capital expenditure... The typical sort of sustaining CapEx spend on deferred strip and the commodities business continuing to invest in the support and growth of that business. In terms of the growth aspects of CapEx, the major item in the commodities number there is the one-money expansion, one-money investment, sorry, and delivery. We've previously advised the market we expect to spend about $126 million on that. on that investment. You're starting to see that come through this half. On the mining services spend, that represents investment in growth, investment in opportunities which will deliver higher production over coming periods. We're also investing in this half. We previously advised that we've made an office acquisition. We're investing again to support the growth of the business with supporting infrastructure as well. As a result of these changes over the half, we've increased our capital expenditure forecast for the year, our guidance, to $600 million. Details are in the appendix. The major driver of that increase is Wanmunna. The balance represents increased investment in our mining services business. In terms of the balance sheet, I think the notes there are pretty self-explanatory. The key point I want to emphasise is we finished the period with over $1.1 billion in cash, a very strong performance. The following slide shows the movement in our net debt position over the half. We've taken the net cash position at the start, made a few adjustments, including for the Wojnar tax payment to get to a pro forma balance at 30 June of minus $8 million. which is a net debt. You can see there that we finished the period at a net debt position of $75 million. So a small increase in the net debt, more than explained by the increase in trade receivables of $178 million in the period. Before I hand back to Chris, I just want to take a couple of minutes to reflect on some of the financial aspects of the business over the last four, four and a half years. Over that period, we've worked hard to grow our core mining services capabilities. We've broadened the offering. We're offering a broader range of infrastructure solutions to the mining industry throughout Australia. We've leveraged that capability, that deep capability, into growing our commodities business. And that commodities business is, as Chris said, performing extremely well. We've made these changes, this growth, without increasing our equity base, issuing fresh equity. We've maintained our gearing levels at conservative levels. The result of those changes has seen increased diversification of our business. greater production, greater production capacity, increased revenue and more reliable, more predictable earnings and cash streams. How do we do that? We do that by taking our capital base and ensuring we invest it prudently. We target returns of at least 20% after tax return on invested capital basis when we're evaluating our investment decisions We take conservative view in terms of the commodity price needed to make a project stack up. Over the last four and a half years, we've accumulated three quarters of a billion dollars worth of free operating cash flow as a result. The group has an extremely bright future. We're well placed financially to ensure that we deliver on the opportunities in front of that. With that, I'd like to hand back to Chris. Thanks.

Thanks, Mark. Operationally, let me just talk a little bit about the business. Anyone that's new to the business, I'll tell you a little bit about what MnRES is. We are a very unique organisation on a world standard. We have... a unique group of people, about 4,000 people in the business and without doubt the leaders of each of the divisions and parts of our business collectively are the best group of people I've ever had the pleasure of working with in my career. They've been around a while, I mean they're incredibly good at what they do and they're the people who have created this business we have. I'd rate Mineral Resources probably the top of the mining services in Australia, possibly in the world, because I think Australia is probably the best in the world at mining and commodities and all of the things that we do. So we're a West Australian headquartered business. We've got about 4,000 people in our business full time. We're headquartered in Perth and most of our operations are in Western Australia, which is arguably possibly one of the best mining regions in the world. We've got a high social acceptability in WA for mining. But we're very good at it. We protect our land. We're very environmentally conscious, the mining industry right across Australia. And I think what we leave behind is without doubt probably the best in the world. We have four pillars in the Minres business. I mean, they're basically our mining services, iron or our lithium, and our energy and innovation. The mining services part of the business is where we started. It's the heartbeat of Minres, foundation of the group, and it's that engine room that gives us the culture and the drive and that can-do where we can make anything happen in a fairly short period of time. But we can do it extremely well. We can engineer everything in-house. We can construct it. We can own it. We can operate it. We can fund it. And we have incredible core competencies to achieve all of those parts. The iron ore business, we've got three operating mines, two in the Pilbara, one out in the Yulgan. The Yulegarn miners have been around probably for about 18 months now. We took it over and it was a forgotten child and we've rehabbed that. I'll talk a bit about that a bit more later. We're probably in the top five iron ore miners in Australia. In the lithium business, we're probably in the top five producers in the world. I mean, our lithium business is very strong and robust. It's just the price of lithium isn't great at the moment, but I think given another couple of years, it's going to be a fairly significant contributor to the business. So we've got Mount Marion, a joint venture with... Gangfang from China, a very, very good partner, very competent. It's been a very successful operation. The Marble Joint Venture, again, another world-class partner in Albemarle. It's a 40-60 joint venture with us having the 40. and we're currently building and getting ready to start commissioning a fairly major hydroxide plant down in Kemerton. That's getting very close to the first train going into commissioning phase. Energy and innovation. We've got a large land holding in the Perth Basin. The land's highly prospective. We've done a lot of work on it. We expect in the next couple of years to own and operate our own gas up there and be able to use that going forward to be able to reduce our carbon footprint. That'll be part of our journey. And the multiple innovation projects we have, particularly around green energy and carbon fibre, Transport systems, we've been incredibly innovative on how we can move dirt from mine site to the coast, and then we're working on the transshipping, which I'll talk a bit more about when we get to Ashburton. So in our mining services business over the last six months, Again, I mean, it's a carbon copy of the previous six months, performed extremely well, very competitive in the market, very strong on delivery to our clients. Volumes are up 23%. EBITDA, as I said earlier, up 37%. We've had two new contracts during the period, and we've had two contracts renewed. So our customer retention remains at the very top end of the chart. So again, The people at our mining services business are very focused on customers and very focused on making sure we do as we say. We're operating 23 crushing plants around the country. As I said, we've got contract mining. We've got 19 open pits, construction division. We generally run a fair number of people in there. We've had a lot of people in that division that have been with us 10 to 20 years and incredibly good at being able to deliver major projects on time and they generally bring them in on budget or a bit better and they've been like that for more than a decade but just one very large core group of people and equipment that it's run incredibly well. We've built The Wanmana mine site, we acquired that in about September and we're turning that on as we speak now. Carina, we've recommissioned that mine so we've got more iron ore going out of Carina and some of that's going up to Kwinana. We've just started loading out through Kwinana again. Again, as I said on the energy, we've got exploration activities that progress well and we're preparing to sink a well up in the Perth Basin and the landowner negotiations have gone extremely well, so that's almost ready to go. It's just a matter of getting a hold of the drill rig. We're in line to get that sometime later this year. The long term on the mining services business, it generally grows at about 20% per annum. I know I say that every time I stand up here and it always does better than that. I said probably 18 months ago it would double over the next three years. I think it's close to getting there now. Our margins have always been very healthy inside that business, mainly because we are innovative in being able to deliver high quality equipment. We're able to manage and operate that, control the costs and be consistent on putting the tons on the ground. Business provides very predictable cash flows and that business has got very, very long annuity streams. So very easy to be able to understand where you're gonna be at five or 10 years with that financially. And looking ahead, substantial growth opportunities. Commodities. We've provided what we think we're going to deliver in terms of tonnes, costs, revenue. Again, the cost control, as I said earlier, has been, again, very good, incredibly good. I mean, it's been some tough times in there. We've had some challenges, as I said, down in the Yulegarn hub. We took over a mine that was extremely run down, way behind the eight ball in terms of approvals, no mine planning in place. All the infrastructure was very tight, but we've been working hard on that and the team have fixed that up almost. We've got a bit more work to be done down there, but they've got it in incredibly good shape. We've got a pretty good mine plan down there. We're working that out to a 10-year plan. We'll get there. We've had de-watering issues in the Deception Pit. We've overcome those. We've finally got approval for that so all of these things are going to help us to be able to better manage the quality of the blend coming out of there over the next six months as I said earlier we're shipping out of Esperance and Kwinana we've got Esperance pretty much choked and as we get better and better each quarter this financial year gets better in terms of volume and the better the volume again the better the cost control Utah Point Hub, again, solid performance. That's mainly the dirt coming out of Iron Valley. The lithium, we're seeing an increase in demand finally. We're starting to feel the prices are starting to lift out there. I mean, it's going to be gradual over the next sort of six months. But as I said, I think two years down the track, our lithium business is going to be a very strong performer. It's going to add a significant value to Minres. Mount Marion, we had one shipment that was deferred from quarter two to quarter three. Otherwise, everything went fairly normal down there. Production up 36%. Exports were up eight. And our costs, 15% lower than the previous. So trending in the right direction again with Mount Marion. The Kemerton, the construction is going extremely well down there. The Albemarle team have done a great job They've got about 1,250 people on site. We've got probably 20 of our cranes down there helping them. We've got one of our core construction teams down there also just making sure that we help them wherever that we can to get that delivered. But around April for train one and October for train two at this stage, all things going well. So it's sort of... What we've done over the last six months doesn't sound like a lot, but it kind of keeps us pretty busy here every day. I mean, we're all sort of here in the business every day. We're focused. We're running an essential service. We've been able to keep our core operational people in the office during the recent lockdown, but we're well versed on how to manage that and how to make sure that we've got the right social distancing. Great credit to our people. We had probably the largest COVID gold testing facility up and running within 24 hours of a case coming live. We have got probably the two largest testing stations in WA. We opened that up to the government, to the public, so that we could help wherever we could with that. And we're still testing our people to make sure that every one of them goes to sites free of the virus. So growth strategy going forward is probably the part you'd like to try and glean as much out of as you can and we'll tell you as much as we can. So our four pillars of the business is obviously where our focus is. We're going to continue to build the crushing business with the normal external work that we do out there. It's a good own-operate model. It's got high-quality equipment. We've got great innovation there that keeps us pretty much ahead of the competition. We've got a balance sheet now that allows us to be able to take advantage of good opportunities when they come along. So the sort of things we're looking for going forward, just as a summary in the mining services business, we're looking at build and operate of our own ports. We've got a couple of them that we're looking at. We want to have privately owned transport systems. Again, we're looking at two of them up in the Pilbara. We want to continue to identify joint venture opportunities with high-quality complementary partners like we've been doing through the last decade, and we've been very successful at that. It's something we want to carry forward. And in those joint ventures, we're able to be able to provide them security in terms of how they operate with our skill set we have here with the local guys on the ground. But we will be looking at securing more of those mining services. contracts, life of mine type contracts in those joint ventures. In the iron ore business, we're going to extend the Yulgan and the Utah hubs. We're going to get a good mine plan around them for the next decade out to make that a lot easier to manage. We're going to establish the Ashburton hub. We're going to develop a Cape Carrier capacity shipping through Port Hedland to support our Pilbara hub. In the lithium, we're going to look over the next two to three years of being able to build out a lot of hydroxide capacity so that we simply stop selling spod. We want to be able to convert all the spod that we produce into hydroxide and then we want to be able to deliver that out to the battery makers and we want to do that obviously with our partners as well. And the clean energy and the innovation side, we aim to own our own natural gas. That's a key part of our strategy going forward. And then on all of our major projects, we're looking at solar, wind, and any new developments that we can make work to eliminate firstly the diesel. So just a little more detail around where we're going on the mining services. As I said, that unique skill set, the innovative equipment that we create develops the opportunities, and we do that in multiple ways. We do that directly with our good clients that we've been out there working with for the last 10, 15 years and longer. And then we also take advantage of opportunities where there's stranded deposits and commodities that are out there that we can use our skill sets, our equipment, and be able to deliver that to value somewhere. We can get it to a port, get it to customers that want to buy those products, and we do that sometimes on our own, sometimes we do it in joint venture or partnership with other organisations. We've got the balance sheet to be able to do that. We're looking at the moment on projects where we can set ourselves for 30 to 50 years, and we want A-grade infrastructure and resources to do that. So we've identified how we're gonna do that. So we're going in the mining services. We wanna own and operate those ports. haul roads, we're looking at four to five major crushing hubs that we're gonna develop over the next three years, and we're gonna establish a trans-shipping business, and we aim to commence with about four 20,000 tonners that we've been able to design and develop, not just in-house, but with some of the experts from around the world in North America and in Europe. So we're close to having a lot of that ready to go into construction phase. We're always subject to approval, so we're working through a whole range of approvals. You can imagine through the mining, the haul roads, the miscellaneous licences, getting the approvals with the ports and where we're going to put all our storage, all those things. It's intense. Our teams have been working on that now for close on a year, and we're getting very close to being in a position where we can make some sort of solid announcement. We'll keep you abreast of that. We're looking to... Develop, as I said, South West Creek and Port Hedland. That was set aside by the government in 2008 and it was to be used by an emerging mining company, juniors they call them. Junior miners are generally those companies that have got a balance sheet but they don't own a rail and port system like the big guys. That would be us. Mineral Resources is probably the only emerging iron ore miner with the financial capability of being able to develop those births, and we're waiting on ministerial sign-off, and we anticipate the decision will be made sometime shortly after the election. So, growth strategy in Iron Ore. The hubs for our existing operations, both in Utah and Yulgan. The Utah hub, we're about to bring on the Wanmana, mine, so we were approached back in about September last year and we had it done by the end of September. We started building fairly quickly on that, so a four month time frame, I mean that's testimony to our people on how they deliver. I mean who does that in four months? I mean we're going to be first ore coming out of there in the next couple of weeks. and we'll be at a 5 million tonne run rate and we'll probably grow that. So incredibly innovative of our people. So, you know, crushing plants up there, mining equipment, camps, approvals, and we've had all of the government agencies join with us to make sure that that happened. And the way it has Lambs Creek, it's going to be construction ready by about second half of next year. And Wedge, it'll be construction ready about 12 months down the track. Ashburton Hub, we're going to develop the Camina and the Bungaree South. We're finalising the approvals in there now and there's I think there's over 200 approvals we've got to get for that project. A lot of them are in hand. We certainly have a good partnership going with the government agencies to make sure that they help us get that all the way through to operation. We anticipate being ready to start construction about mid this year. It's about a two year build. It entails about a 25 to 30 million tonne a year run rate. It'll be on road transport, but we've developed these very large trucks that can move about 330 tonne payload at a time. So our cost on transporting that ore from mine site to coast is probably in the order of about a third per tonne kilometre is what it is with the Iron Valley. So fairly innovative again. They're the largest off-highway road trains in the world. And then we're going to go to the transshipping operation out of the Ashburton port. So we hope that we're going to start construction on those transshippers probably before June. But again, once we've got all that wrapped up and it's approved to go ahead by our board, we'll come out with an announcement. And again, South West Creek, as I said, that's simply waiting on us to get approval to build the birth space we need in South West Creek. And Marillana is basically construction ready. So we'll be turning our attention to both of those probably simultaneously. Growth and strategy on the lithium business. We'll simply continue where we are at Mount Marion. We'll continue with the focus on reducing costs. Production is probably where it's going to sit for the foreseeable future. Wodgina remains on care and maintenance. Kemerton, by the end of this year, we're going to have those two trains running. And once they get up and running, there's a period of time they've got to operate to produce what they call Panasonic grade, which is probably about six months. But... You can see that that's going to be a high quality plant that we've got based here in Western Australia. Good for WA and good for Minres. We're committed to lithium long term. We're certainly looking to invest a lot in the next 18 months to two and a half years in terms of hydroxide. So hopefully we'll be able to achieve all of those things. There's a lot there on our plate, but they're all real and they're sitting there and we're pretty much ready to go on most of them. So guidance. We've got substantial opportunities. I'll just give you a taste of what they look like, both with existing customers, joint venture partners and new opportunities over the next two and a half to three years. I think three years down the track from now, the MinRed business in terms of tons and in terms of revenue and bottom line will be at least double where we're sitting at the moment. So we've got some work to do. Commodities, obviously a key focus on being able to develop the business going forward. We've given you tons and we've shown you what we think the costs are back further. So you'll be able to kind of figure out where we're going on that. Iron ore production going forward for this quarter and the next quarter are going to be always more than the previous. I don't know why that is. Our second half production is always higher than the first. Our second half results always seem to be higher than the first. I don't know why it is. There's no reason. It just happens that way, but it's going to happen again this year in the same way. Lithium production, look, it's going to remain stable. And I think around the mining services, Just to give you a bit of a colour on that, I expect that probably about 30% growth per annum over the next three years, year on year. That does not include what we would do with Ashburton and Southwest Creek. So with Ashburton, we would probably... have a mining services arrangement sitting in there where we do the crushing, the road haulage and the transshipping. That's all using proprietary min-res innovation and that's not something that we let outside of the business so we control that. So there'll be mining services coming out of there probably. That's a substantial life of mine contract, probably 30 years plus. And then we'll be sitting in a similar position where we'll deliver the iron ore road transport and port facilities for the Marilana operation. Again, that'll be a life of mine mining services contract. So a lot of growth sitting inside there. So we'll see if we can make all that work, but I think we will. And then, look, just to wrap it up, closing comments. I want to acknowledge Mark McGowan and his team. I mean, they've been pretty amazing in managing us through this COVID. I think we cop a bit of criticism from the East Coast, but just to understand this, I mean, we've all had our freedom for all but one week. most of the way through the COVID virus most importantly we've been able to keep our minds running our business running and the best part of that is we keep all our people employed they were all remained on their same pay and everyone's been able to get through this unscathed I have no doubt we're probably in close on the best region in the world for lifestyle right here right now so well done to Mark and his team and also the support that we've been getting out of the government agencies and being able to get the projects going. They're very focused on trying to improve the timing on getting these approvals done and work a lot closer with industry to make sure we've got plenty of jobs going forward for our people. I want to thank our board. They've been incredibly supportive. A lot of them have been operating remotely, but keeping their finger on the pulse and making sure that we've got the support we need and all the right controls are in place. Also welcome to Susie Corlett, a great addition to our board. Very savvy lady, understands what's going on under the earth and she understands what's happening commercially in the business. So a great skill set that she's brought onto our board and she's going to be very invaluable to us going forward. Welcome, Susie, and thanks for joining us. Huge thanks, of course, mostly to the MnRES team for the management that support me for the effort you guys put in and for putting up with me. I don't think I'm, according to my wife, the easiest person to put up with. But thanks, guys, for being there and thanks to everyone out on the sites for the effort you put in, particularly over the last 12 months. It's been nothing short of outstanding. My team, Paul Brown, Mike Gray, Mark Wilson, the guys that helped me make this work. To all of you that have believed in the Minres business so far, thanks for that. We've got miles to travel. A lot of opportunity ahead of us, particularly around the mining services and the commodities. We're going to continue to deliver to our clients. We're going to put safety and well-being of our people in front of everything we do. And most importantly, we're going to make sure that our customers, the people we work with, everyone that we deal with, we're going to do it with respect and with dignity. I mean, most important for the culture that we have in Minres. It's one of those things that is getting stronger and it glues us together. And I want to, just a last mention, I want to say we want to keep doing the things that we've done around the traditional landowners for the last 25 years. We want to make sure that we continue to engage with them. We're looking at better ways of doing that. We're looking at better ways of bringing more of the traditional landowners inside our business. We're putting a lot more effort on that. We're going to understand what they require and we're going to make sure that commitments that we've made to them, we will always continue to deliver. And we're certainly going to always acknowledge them as the custodians of this land that we live on and we operate on. So with the utmost respect for all people that we deal with, regardless of who they are as a core fabric of Minres. So with that... We're done, thanks. And if there's any questions out there, I'm glad to see if we can answer them. Mark, are you going to join me?

Thank you. If you wish to ask a question via the phones, you will need to press the star key, followed by the number one on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the Ask a Question box. As a courtesy to others, please limit yourself to two questions at a time. And if you have further questions, you're more than welcome to rejoin the queue to ask further questions. Your first question comes from Hayden Bairstow with Macquarie. Please go ahead.

Hi, Chris and Mark. Great result. Just wanted a couple of things on iron ore first. So just to get an understanding of sort of timing on what you're thinking with Bungaroo and sort of how that might play out in terms of the second half, or is it literally just going to be an FY22 story in terms of real spend on that project? And just secondly, on Lithio in Mount Marion, sort of cost performance really impressive. Have you sort of advanced any thoughts on going downstream in that JV with Ganfeng and the discussions with Albemarle, obviously with Kemerson finishing? Are we expecting Wojnar to be turned on sort of the day Kemerson gets commissioned, or are you going to give yourself a bit of a, a head start ahead of that, or maybe afterwards just keen to see how those levers might play out over the next 12 months?

Yes, okay, Hayden, well done on getting your response to our results out. I mean, record time, it must have been about eight minutes, so congratulations on that, good write-up. So Ashburton, Bungaroo South, Kamina, up there it's, look, we can't say too much more than where we're at at the moment because we're still working on getting a few of the the approvals finalised, and we're still working through with a couple of government agencies on a bit of detail, but look, we're optimistic that in the next couple of months that we'll have all that done. Being a bit conservative, saying we're gonna start construction by about mid-June, and it's about a two-year build, but I mean, I can't tell you a lot more on that side. And look, certainly on the downstreaming, around our lithium business. It's something that we're heavily engaged in. Not a lot that I can tell you on that other than the fact that we're engaged in doing it, we're gonna do it. I can't exactly tell you what yet. And I think probably in fairness, I mean, I don't think I have ever give you too much information, so I probably don't wanna spoil you now.

Your next question comes from Matthew Freidman with Goldman Sachs. Please go ahead.

Yeah, thanks. Morning, Chris and Mark. A couple of questions for me, if I can. Firstly, just on the iron ore business, and I guess picking up on your last comments there, Chris, you've clearly got a number of new iron ore projects in the pipeline. Can you talk through where you're at with heritage approvals across those projects? Where do Section 18s exist across that portfolio? And I guess, do you expect you'd have to potentially revisit your timelines on any of those projects if there was a change in the approvals process?

Yeah, no, look, I mean, everything's going exceptionally well on the approvals, and even like on the Section 18s, they're probably not a great topic to talk about, but I think, look, Section 18s are still being issued to mining companies out there, as they have in the past, but I think everyone's heavily focused on that, no doubt, and we've recently had one issued to us, but, I mean, again... I think all the normal things out there that are happening around that are still okay. We have always been very engaged with TLOs and I think we've always delivered on our commitments. We're not going to change from that. We've obviously got a much stronger emphasis on that now because we don't want to have a slip. But the approvals, look, all I can say is they're going well. There's a lot of them we're doing out there, and we expect to probably pretty much be there with them over the next three or so months.

Yeah, fantastic. Thanks, Chris. And then just secondly, again, still on the iron ore business, and particularly the bigger projects that you've got in the pipeline, Would you consider a sell-down on those assets over time, I guess, you know, post-completion of construction to crystallise value in the same way that you've done at Wojnar, or do you see Min retaining 100% of the equity exposure in that particular part of the commodities business?

No, look, we would certainly consider somewhere around a partial sell-down or a joint venture, and those things are being considered. And... Hence the reason why we do with every project we develop like that, we carve out the mining services parts that are important to us for two reasons. One is that that proprietary equipment, we don't let it outside of the business. And secondly, you know, our mining services business is probably the core to what we do. So everything we do has that focus front and centre. So, yeah, but the answer is we are considering that. in a couple of areas of doing just that. Partnerships, JVs, and that would include sell-down down the track.

Sure, thanks for that, Chris. Look, I've got a few more questions on the lithium business and the mining services business as well, but I'll get back in the queue if there's time. Thanks.

Your next question comes from Levi Spry with JP Morgan. Please go ahead.

Yeah, g'day. G'day, Chris and Mark. Thanks for the call. So just on Lithium and Wagener, what exactly is required to turn that on and ramp it up in the context of Kemerton and potentially Kemerton being set by Greenbushes? Can you just step us through the process there over the next 18 months?

Yes, sure. there's no firm understanding of when we can turn Wajina on. I mean, I think we're just a little more enthusiastic now than we were six months ago. There is no doubt that you can see demand out there is growing. No one can, I don't think anyone can guess when we're gonna have enough demand to turn Wajina on. And when we turn it on, we'll probably do it a train at a time. I don't think we can get an understanding yet of what the demand looks like, but I think we will over the next six months. I can probably give you some, a little more colour around it, but it won't be till around June.

Okay, thanks. And so just in the context of our model, raising equity, build more downstream in China and, you know, stage two at Kemerton, you know, So that fits into your June timeline, thinking about building stage two there, keeping construction guys on site, making it, you know, dovetailing sort of those construction works. Is that how we think about that? And I'm still not clear on this, how Greenbush fits into your JV without Mark.

Yeah, look, I think it's probably only in the last, 30 days where the market seems to have turned somewhat and everyone's enthusiastic about lithium again and that created an opportunity for Albemarle to go and do their cap raise. We are talking to them. about how we're going to move forward. They are just back into growth phase again. So look, it's going to take some time to work out where the best opportunities are and the best bang for our buck is. But I think it'll probably take three to six months for us to get there and get a landing on what we're going to do.

Yeah. Okay. Thank you. And just a sneaky one on Utah Point. So Lamb Creek and Wedge are new to me. Are they mine replacement projects? And do I think about Utah Point production ramping up to 13 million tonnes or so over the next couple of years? Is that sort of a number?

You can think about it heading towards about $14 million over the next six to nine months. That's probably sort of the number. The other two projects, they're a combination of replacement tons and also blending tons. We're just getting our blend better and better up in that region, bringing one mana into The Iron Valley blend is going to make quite a significant difference, so we'll probably be backing off on Iron Valley tons shortly and ramping up one munna just to get that blend the way we want it.

Yep, great. Thank you. Thanks, Chris.

Your next question comes from Georgina Fraser with UBS. Please go ahead.

Thanks, Chris and Mark, and congratulations again on the result today. Just to circle back on this topic, and it's been touched on a couple of times by the analysts and questions, but hoping to get a little bit more clarity around this Kemetan-Wajana relationship. So if Kemetan, if Wajana was to feed Kemetan and the timelines that you flagged earlier on the call about the trains commissioning timeline, wouldn't Wajana need, wouldn't you guys have to be starting to think about ramping Wajana up now? what would be the kind of timeline that you'd be looking at to get the Wojnar trains up and running? Or are you still seeing Wojnar just purely selling spot and not being brought down to Kemerton for conversion?

No, look, like I said earlier, I mean, we need a lot more demand out there in the market to be able to consider turning Wojnar on. I mean, it's quite a commitment putting a workforce up there. but we just don't have that demand out there. So we need to see that. To turn it on is no big deal. I mean, it's a process. I mean, we've got to go and move some people around and bring some more people into our workforce to make that happen. But, I mean, three or four months probably to turn it on when the time's right. But, look, I don't think we're even considering turning Wajana on in the foreseeable future until we can see that demand. So, I mean, it's just not worth talking about at the moment.

Okay, thanks for that. So what will feed Kemerton for the commissioning? You talked about that six months of qualification with the Panasonic product. What will be the ore that will be creating that product or being used to bring that product online?

Look, we've got a couple of options with that. We can obviously, Albemarle are managing that, but they'll obviously do something around their green bushes. But we also have a product that comes out of Mount Marion. So we've got a few considerations on what to do. But again, look, they'll be commissioning it and ramping it up on the green bushes dirt. But in the medium term, I don't think we've sort of figured out the best way of doing that yet.

Okay, thank you. Your next question comes from Rahul Anand with Morgan Stanley. Please go ahead.

Hi Chris and team. Thanks for the opportunity. Look, the first one's on the mining services. You did flag that one of the contracts wasn't renewed. I just wanted to firstly check with Mark. Mark, is the revenue and EBITDA contribution of that already out of the numbers, or does it come out in FY22? And then, Chris, for you, if you could shed some light on the contract and perhaps a bit more detail, that would be good. I'll come back with the second question.

Hi, Rahul. Thanks for the question. So the answer is the contribution of that contract's not substantial for the mining services business. It's not a core crushing contract. It's one of the ancillary services that we provide to clients through Western Australia. And you'll see those numbers disappear. Well, actually, you won't see them because they're not going to make that big a difference in the second half.

OK. Well noted. Okay, so then the second one was on Ashburton. So you flagged the mid-2021 construction. Chris, I wanted to quickly check. Obviously, this private haul road, you're using a new type of road train. Are there sort of different types of requirements and costs perhaps for this road, or can we just use a general industry average? I mean, I'm just trying to get my head around how much capex could be and, you know, obviously the transshipping port that you talked about as well. Thanks. And also product grades, if you can comment on that.

Well, it's probably easier if you let me give you that detail once we get to a point where it's a goer. But look, on building private haul roads, it's something that we do inside the business. We've just built about 130 kilometres of private haul road over the last six or eight months, mainly down around the Yule Garn operation. Built it and bitumised it so that it's all weather. We can build them fairly efficiently. We've probably got... 200 to 250 k's that we'll be building in the Ashburton region. We'll probably have two mining hubs there with our next gen two crushing plants. The big road trains that we run, as I said, they carry 330 tonne. They'll go into a port. All of the iron ore will be covered on the transport and it'll stay covered until it gets out onto the Cape Carriers about 20 miles offshore. And yes, there is a fair bit of capex in setting that up, but it's going to be operating at 25 to 30 million tonne run rate. And the good thing about that is that the ore bodies are relatively close to the port. So our cost of getting the dirt to the port is fairly low, and transshipping is fairly low compared to... It's less than half the cost of putting ore over Utah Point or over Kwinana, for example. So it's an... There's a bit of capex involved, but it's a 20 to 30 year type operation and it's got fairly good payback.

Okay, perfect. Just one on lithium, if I may, for Wajana. How do you see the capability there of having similar sorts of recoveries going forward in terms of what you've been able to achieve at Mount Marion in terms of cost out, which is quite remarkable? Do you think there's opportunities in Wajana as well? Similar in nature.

Yeah, look, absolutely. The commodities business has done the work on that. They understand what the recovery is going to look like there. They're going to be very similar, if not the same, and they've reworked what they think their cost structure will be on that, and it's obviously going to be less than what it was in the past. So, yeah, we've got a pretty good result out of that, and the capability of that plant in terms of tonnes per annum of production is probably up, probably more than 20%.

Okay, perfect. Thanks for that.

Your next question comes from Jack Gabb with Bank of America. Please go ahead.

Thanks and good afternoon, good morning. Just wanted to follow up one more on Ashburton. You already talked to the potential op-ed savings from trucking or larger trucks relative to Iron Valley and obviously transshipping relative to Utah Point. I just wonder if you want to take the opportunity to put it all together and just give us an approximate operating cost or indeed capital intensity as well for the project. You obviously have the numbers, so whether you want to guide through or are you going to wait until the full year? Thanks.

Yeah, no, look, we're not ready to release those costs yet. Look, I promise you as soon as we've got the approvals and we know that both those projects are clear to go, we'll give you all the detail around them. We're just not in a position to be able to release any of those numbers at the moment. I mean, I've given you as much as I can around what I expect the tons to be and we'll be certainly in a good position. The Ashburton project is going to be in... the low cost quartile that we're aiming for so that we've got security for long term. And so will the Pilbara project coming out of Marillana.

Thanks. And then I guess broader picture on Ashburton, I guess it really opens up the West Pilbara to you. At what point does it make sense or would it have made sense to put in a Cape size berth at Ashburton? I guess the channel's big enough Is it 50 million tonnes, and what's the potential longer term from post the initial 25, 30? Thanks.

Yeah, look, good question. I mean, probably, does it ever make sense? I mean, the capital that you've got to spend and the dredging and the disruption up there with the dredging is... something we've considered, but the cost of transshipping is not that big a deal. I mean, and the transshipping is a business that we want to get into because the focus on that is to be able to exploit stranded tons, and there's a lot of them around Australia. So we want to be able to hone our skills and be very good on that transshipping operation. I mean, and you don't just need to transship from areas where they don't have... Cape-sized carrier capacity. I mean, there's even capacity to be able to transship out of places like Port Hedland and Karratha. So it's a business we want to develop. I don't foresee that we would ever be looking at Cape-sized carriers and Ashburton.

Perfect. Thanks very much. I'll pass it on.

Your next question comes from Stuart McKinnon with the West Australian. Please go ahead.

Oh, good day, Chris and Mark. Yeah, look, I just wanted to get some colour around. Obviously, there's a lot going on in the state's resources sector at the moment. And I was just wondering if you were finding any sort of issues with skill shortages, wage inflation, getting equipment to site, getting equipment delivered and equipment built. Yeah, and how does this boom, this mini boom, if you like, compare to the last one?

Thanks, Stuart. Yes, to all of the above. Do you want more detail around that? Yes, there is a skills shortage. We are all fishing out of the same pond in WA. It's very difficult when the borders open and close, but there's a positive and negative of that. It's hard to get people from interstate, but... Because the borders were closed, we kept our mines open and kept them operating. So as the borders open out east, it does make it a little easier for us, and we've spent a lot of time and money. We're heavily incentivising any of our east coast people to consider coming over to WA with their families and to live here. We've got quite a number of packages that we've put together to be able to subsidise them and just simply pay them to relocate. We keep growing our training facilities and we're looking at a whole new style of training facility where we can take people that haven't considered going into the mining industry and be able to train them to operate, to do processing, a whole range of things. Getting equipment to site is okay. Securing equipment is getting much harder. The lead times are long. So good planning and being well organised is the key. But in saying that too, we've been able to secure the equipment that sort of met where we're going and we've been able to make sure that we got those forward orders. So look, we're surviving okay. I think our growth plans that were put forward, they'll be achievable. But we've just got to do things a lot differently. Again, with the way that we care about our people, we've always cared very much about their safety, but now we're caring about their well-being and their health and making sure that we can add value to that. So we've got nurses in the business, we've got psychiatrists, and we're bringing doctors inside our business to be able to make sure that we can take care of all of our people's medical needs.

Great. Thanks, Chris.

Your next question is a webcast question from Nick McLean with Surrey Asset Management and reads, you referenced your core pillars of the business as it is now. In five years, what, if any, new pillars would you like to add to mineral resources? Also, when you retire in 20 years or so, what do you want mineral resources to look like? Is it a major resources business across different commodities? And if so, what commodities would you like to be a leader in?

20 years is a long way. Will I still be here? Probably. Look, we're certainly heading down the path of making sure that we're in greener commodities. So we're looking at a number of other products out there. For obvious reasons, I really don't want to disclose what we're looking at doing, because if I do, then we just add to our competition. 20 years' time, I'd like to make sure that MnRES is... It's a business where the people that are working with it know that they can be here for a lifetime and that they've got the total package inside the business. I mean, we're working incredibly hard to make sure that we keep our people long term. And to do that, we're building a new office at the moment that's going to be a very state of the art building. It'll be very different to anything in Perth. So we're trying to create an environment for our people in Perth. We're trying to do the same on our camps, so we're going to change the style of the new camps that we build, so it's more of a resort-style accommodation than it is just dongers in the desert. But I'd like to think that people can be with the business. They can start out here as an apprentice or a trainee or a junior accountant and they can be with the business long term with the aim of being able to progress through it and be able to run it. So the commodities we're going to be in, too hard to tell at the moment, but we've got a good vision on where we want to be over the next 10 years. We've got that mapped out and we've got some new products that we will be bringing on board over the next couple of years.

Once again, if you wish to ask a question, please press star one on your telephone or type your question into the ask a question box. Your next question comes from Matthew Freidman with Goldman Sachs. Please go ahead.

Matthew Freidman Yeah, thanks for taking follow-ups, Chris. Just a quick one as obviously we've gone over the hour already. But just wondering on the lithium business, appreciate that obviously you're still working through the details with your JV partner on how you're going to grow that business. Albemarle has talked in the past about the capital intensity being much more favourable in China, and clearly they see that as a focus or a priority for lithium hydroxide conversion growth. Is that an option that you're happy to consider within the Marble JV? And I guess, how does that fit in with the key focus of Minres being Australia and specifically Western Australia?

Look, obviously, I mean, we like to spend our money here in WA as much as we possibly can, and we're much more focused now on trying to bring a lot of the products that we make back to WA. I mean, that's important to us, but we want surety of supply, but we also want to support the industries here in WA to make sure that they can supply to us going forward. I'm not quite sure. What do you think? I think we... Look, in China, let me say this, that, I mean, China's been... They're our biggest trading partner for Western Australian products. I mean, we've got some extremely good partnerships and customers we've had with China over a long, long time, and our relationship with China and our JV partners has never been stronger, so we want to keep growing that, but we've also got... other countries that we deliver product to. Nowhere near as much, but when people say we should go and find other markets for our product, I mean, that's just simply not possible. I mean, Australia is awfully good at trading worldwide and I think that we trade all of the products we can right across the world it just happens that we happen to have a lot of iron ore and a lot of gas and we're very close to china so our relationship with china will i hope will continue to grow over the years and strengthen and look we're certainly looking at best places that we can strategically put plants like our hydroxide and downstream we've obviously invested heavily in wa we'll continue to do that but we probably will look at opportunities in China as well.

Yeah, that's pretty clear. Thanks very much for taking the time on the questions, Chris.

Your next question comes from Damian Williamson with Bell Potter. Please go ahead.

Yeah, hi, Chris and Mark. Just could I get some clarity on what your medium-term targets are for your annual iron ore shipments out of Yilgarn and Utah Point? And also, just a quick update on the status of the Wanmana legal challenge as well, if I could just get an answer on that. Thank you.

Yeah, look, I think we've highlighted that heading out of the Yilgarn hub, we're looking at sort of around 12-ish million tonne run rate. There's some difficulties in achieving those tonnes. I mean, it's... It's always challenging on that railway line and the pits that we're mining out of. We're slowly getting a better and better mine plan down there, but we're probably six months away from getting more security. We need to bring Parker Range and those sort of deposits into the blend. But 12-ish million tons, sort of the aim down there, and up north out of Utah, it's about 14 million tons where we'll be sitting.

Okay, and just in terms of one manner, just a quick update on where the legal case for Fortescue bought.

Oh.

Yeah, is that?

You really want me to comment on that?

I mean... Okay, I don't want to say... Just questioning, because you're starting shipping while the...

Yeah, no, look, we see that as a nothing thing. I mean, we're a little mining outfit and we're just simply being bullied into trying to reduce the tonnes that we're putting out and we're just simply ignoring that. As a matter of interest, they're actually suing the Minister for Mines and they're using a... They had a case around the Mindaroo where because when the mining... the mining was applied for. They didn't put the mineral rights in at exactly the same time. But I mean, that doesn't apply to Wanmana in the sense that Wanmana's changed hands twice with arm's length transactions. So that no longer applies. So I don't know where they're going other than trying to bully us into not putting tons in the market.

OK. Thanks for that.

There are no further questions at this time. I'll now hand back to Mr Allison for any closing remarks.

Okay well thanks everyone for joining us. I hope that look we work hard to try and deliver the results that we do. I think we're getting a little more predictable in what we're doing. There's obviously a certain amount of information that we're not ready to hand out. I don't want to go and give you budgets, costs and tons and what we think we're going to do at Ashburton and then come back in six months time with changes. Those things are the things that you guys remember so just give us the time but we're growing our business and we're delivering a bottom line and we're delivering dividends so and they're difficult times that we're working through at the moment with what's happening out there in the world but we will certainly as soon as we are in a position where we know that we can give you real information I mean we'll always make sure it's available to you so look thanks for your support everyone out there and thanks for especially from my staff and we'll be back in six months time so thanks.

That does conclude our conference for today. Thank you for participating. You may now disconnect.