Mineral Resources (MIN): This morning, the diversified miner and mining services company reported its full-year 2026 results, which were largely in line with market expectations, given its July update, though the dividend was a nice surprise.  The HNW Growth Portfolio holds a 5% weight to MIN.

Key Points:

  • Record Earnings: Mineral Resources reported record profit for the full year, with profits increasing to $1.2 billion, driven by record mining service volumes and the full ramp-up of the Onslow iron ore mine. Min also benefited from increased lithium prices, with the price increasing from US$972/t to US$2,290 per tonne, adding nearly $500 million in profit to the result.
  • Lithium Sell-down: During the half, MIN sold down 30% interest in its two lithium mines (Wodgina and Mt Marion) to POSCO for $1.2 billion. This lowers MIN’s exposure to lithium market volatility and provides upfront cash for assets that the market valued at $0 this time last year.
  • Balance Sheet Deleveraging: Over the past six months, MIN has paid off over $1 billion in debt, taking its net debt position to under $4.3 billion. This has brought MIN’s leverage down to 1.7x or 1.2x, accounting for the lithium selldown. (See Below)
  • Dividends Reinstated – a big surprise: Given that the balance sheet is back in a strong position, Min announced a full-year, fully franked dividend of $0.83 cents per share, representing a payout ratio of 20%. Atlas expected no dividend; however, management pointed to operational improvements and Min’s $913 million in their franking account credits.
  • Guidance: MIN management announced that they expect mining services volumes to increase again next year, driven by a full year of Onslow at nameplate capacity and third-party contracts. Management did highlight that they are looking at several copper opportunities overseas to further diversify the business away from iron ore and lithium commodity prices.

CEP Strategy: MIN is a diversified miner and mining services company with four main business segments: mining services, lithium, iron ore and gas. Mineral Resources is the world’s 5th largest lithium miner with two operating Tier 1 hard rock mines in Western Australia. The company has a unique business model that involves owning assets and providing mining services to both its own and external clients. This gives investors a per-tonne annuity income stream that is not correlated with commodity prices.

MIN finished down 2% to $65.37, a surprising move, as the share price was up +4% early but fell after management talked about a potential acquisition of a copper asset in South America. Stick to your knitting, boys.