Mineral Resources Ltd (ASX:MIN) recently criticized major automakers for lagging in the shift from combustion vehicles to electric vehicles (EVs). According to CEO Chris Ellison, automakers prioritize combustion engines for profits, hindering EV development.

Mineral Resources and the Lithium Market

The slowdown in EV sales has caused lithium prices to plummet, impacting producers like Mineral Resources. Ellison pointed out that the world’s demand for carbon reduction remains and anticipates a shift in supply dynamics by 2026.

Financial Challenges and Strategic Moves

The current lithium market conditions have pressured Mineral Resources to cut costs, suspend dividends, and strengthen cash reserves. Despite these challenges, the firm reported a 10% revenue increase to $5,278 million for the fiscal year ending June 30, 2024.

Impact of Falling Lithium Prices

The decline in lithium prices led to a 40% decrease in underlying EBITDA to $1,057 million and a 79% drop in underlying net profit after tax to $158 million. However, iron ore prepayments bolstered operating cash flow by 9%, increasing it to $1,909 million.

Mineral Resources’ Liquidity and Growth

The company maintained liquidity with $2,833 million available, despite an increase in net debt to $4,428 million. The mining services division saw a 9% rise in production volumes, contributing to record earnings. The company enhanced its infrastructure focus, marking a shift towards future growth.

Diverse Income Streams and Market Position

Ellison highlighted the strength of Mineral Resources‘ business model, with increased production in mining services and strategic expansions in the lithium division. Even as lithium prices remain low, the company’s diverse operations continue to deliver significant earnings.

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