Mineral Resources banks $200m from haul road partners after hitting Onslow Iron shipment target

Mineral Resources will bank an extra $200 million from its Onslow Iron haul road investment partner after hitting a milestone shipment target. Morgan Stanley Infrastructure Partners became a 49 per cent stakeholder in the 147km-long road — which this year has been plagued by safety issues and truck rollovers — when it paid MinRes $1.1b billion last year. The Chris Ellison-led miner said on Monday the contingent payment from MSIP was due after MinRes managed to ship 8.75 million tonnes of ore from the Port of Ashburton between August and October — reaching the run-rate target of 35 million tonnes a year. “Achieving sustained nameplate capacity at Onslow Iron over three consecutive months is another significant achievement for the MinRes team and our partners,” Mr Ellison said. “I’m proud of the dedication and expertise that has brought the project to consistent nameplate levels, showcasing the extraordinary capability of our people and the strength of our innovative pit-to-ship supply chain.” It was revealed late last month that MinRes would start letting go scores of trucking contractors after it completed upgrades to the haul road, which has been hit hard by cyclones and a number of truck rollovers that raised serious safety concerns. The extra workers were needed to keep iron ore moving to port as travelling speeds and load sizes along the route were reduced while $230m of improvement works were completed. The sealed width of the road now spans 11m from edge to edge, 2m wider than typical public roads used for heavy haulage in the Pilbara, and asphalt was added along the entire length of the sealed road. MinRes chair Malcolm Bundy said the $200m payment strengthens the miner’s financial positions and demonstrates its ability to operate Onslow Iron consistently at nameplate levels. Analysts at RBC Capital Markets also cheered the cash boost, saying it would ease pressure on the miner’s balance sheet, which is carrying net debt of more than $5 billion. “Today’s announcement confirms Onslow Iron is performing at steady-state nameplate ... demonstrating supply-chain reliability, it said in a note. “Moreover, the $200m cash inflow immediately improves liquidity and brings total haul-road monetisation to $1.3b, which exceeds early expectations.”