Mineral Resources (ASX: MIN) shares jump 7% on Q2FY24 update

Highlights

• Mineral resource is an ASX-listed company that offers safe, high-quality, low-cost mining, mining construction and mining infrastructure in Australia
• In 2QFY24, MIN registered 9% QoQ rise in the mining services segmental production volume to 72mt
• Ellison (Christopher James) has the maximum stake in MIN with a shareholding of 11.51%

Established in 1992, Mineral Resources Limited (ASX:MIN) is an Australia-based mining services firm that caters to the Western Australian mining sector. Moreover, the company is also engaged in development of its portfolio of lithium and iron ore operations.

Recent quarter performance

During the second quarter of the financial year 2024 (2QFY24), the company reported 9% QoQ growth in the mining services segmental production volume to 72mt and 23% QoQ rise in iron ore shipments to AUD 4.8 million. In 2QFY24, lithium segment spodumene concentrate production at Mt Marion surged by 30% QoQ and shipments grew by 34% QoQ to 86,000 dry metric tonnes.

Key drivers for the mining sector

Data by the Australian Bureau of Statistics (ABS) indicated that in November 2023, business turnover for mining industry of Australia has increased for the fourth straight month, recording an increase of 4.9%.

Construction industry (15.2%) marked the highest annual rise in business turnover in November 2023, followed by accommodation and food services industry (8.1%).

Comment by ABS head of business statistics, Robert Ewing highlighted that the mining sector turnover increased because of renewed demand for coal and increased iron ore prices. International iron ore prices were supported by higher steel production in China.

Key challenges for the mining sector

In November 2023, turnover in the mining industry dropped by 8.7% over the previous corresponding period (November 2022). In 2023, spodumene concentrate price declined by 80% after rising to over USD 8000/tonne in late 2022. This resulted in lower turnover for the industry.

Top 10 shareholders of MIN

The top 10 shareholders of MIN have nearly 36.72% shareholding in the company. Ellison (Christopher James) and BlackRock Investment Management (UK) Ltd, have the highest stake in the firm, with a shareholding of around 11.51% and 5.37%, respectively.

Outlook

In FY24, the company expects to report iron ore production of 7.5 to 8.3 million tons in the Yilgarn hub and 9.0 to 10.5 million tons in the Pilbara hub, with MinRes share. The expected FOB cost in FY24 in Yilgarn is AUD 97-107 per tonne, and in Pilbara, the expected range of FOB is AUD 67- 77 per tonne.

During the stated period, the expected range of total mining services volume is around 260 to 280 million tonnes and the company expects to report capital expenditure of AUD 2,750 million.

Share performance of MIN

MIN shares closed 7.07% up at AUD 59.39 apiece on 25 January 2025. Including today’s gain, MIN’s share price has declined by 36.95% in the last one year and has dropped by 18.53% in the last six months.

The 52-week high of MIN is AUD 96.97, recorded on 24 January 2023, while the 52-week low is AUD 56.2, recorded on 23 October 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 25 January 2024. The reference data in this report has been partly sourced from REFINITIV.

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