Mineral Resources (ASX: MIN) is tightening its operations in response to declining lithium and iron ore prices. The company, a major iron ore and lithium producer, reported a significant drop in earnings. Its full-year earnings fell by 40%, and underlying net profit after tax plummeted by 79% to A$158 million.

Impacts on Lithium

MinRes saw a 71% decrease in EBITDA for its lithium division, with margins falling sharply from 70% to 27%. Despite these challenges, CEO Chris Ellison emphasized the importance of maintaining operations and workforce, focusing on reducing unit costs through efficient modifications.

Iron Ore Developments

MinRes has started its Onslow Iron project, aiming to increase its annual production capacity significantly while reducing higher cost operations elsewhere. Despite describing iron ore as “boring,” Ellison recognized its financial stability, with expectations of the price maintaining support at around $100 per tonne.

Financial Adjustments

The company is deferring expansion projects and conserving cash to address its financial challenges. Job cuts have already taken place, and capital expenditure guidance is strategically set for the coming year to curb expenses.

Outlook and Strategy

Ellison labeled FY25 a “very conservative year,” with exceptional focus on financial prudence. The company expects to increase its mining services volumes while striving to lower costs across all operations. Despite market stress, MinRes is committed to strategic cash management for future strength.

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