Mineral Resources Limited (MIN) Earnings Call Transcript & Summary

Okay. Thank you very much for that. Ladies and gentlemen, that concludes our discussion on the terms of business. In a couple of minutes, I will close the voting system. Please ensure that you have cast your votes on all resolutions. So I'll now pause to allow you time to form those votes, if you haven't done so. [Voting]

Thank you for that. I now declare voting is closed. The results of these votes will be released to the Australian Securities Exchange later today, and I thank you all for your patience. Before I hand over to our Managing Director, on behalf of the Board, I would like to acknowledge Chris and his team for their extremely quick response to the pandemic. Our response is built around 3 areas: keeping our people safe and well, maintaining safe and reliable operations, and supporting our communities. Chris will speak more to the actions we took, but I do want to recognize the extraordinary efforts from the entire MRL workforce, in particular, our operational teams who responded to all the changes we needed to make -- to keep our sites safe and our mines operating. I know at times, it was not easy, and the Board are extremely grateful for each and every member of our Mineral Resources team. I'd also like to thank the Board, and I'll say to our shareholders that you should be very proud of the executive team and the Board, who are there to support you and to add value to your shareholding. As there are no further business, this concludes the formal proceedings of the meeting. And I now invite Chris to take you through the activities of this extraordinary year and has -- and let him expand on our future growth plans. Thank you very much.

Thanks, Peter. You're right. It has been an extraordinary year. We've had a whole bunch of things come at us that we never saw coming. But anyway, look, welcome, everyone. Thanks. Good morning. I'm Chris Ellison, I'm Managing Director of Mineral Resources. I'm here to take you through the year that's been and how we got through that year and how we're going to deal with where we're going in the future. I want to thank Freda for delivering that Welcome to Country. She's always so elegant the way she does it, and I think she actually connects with some people, which makes a big difference, particularly for the times we're in. I know that she's always going to be purple. I don't want to change that. I'm always going to be black. And I think that's very appropriate with the All Blacks. But my second team, of course, here is Mineral Resources Park. I also acknowledge and respect the custodians of the land, the Whadjuk people and the Noongar nation, and I'd like to pay my respects as well to past, present and emerging. As I said, it's been an extraordinary year. We started with bushfires. I mean they really got forgotten extraordinarily quick. We had the COVID reached the shores of Australia around March. And having seen what it had done going through China and going through Europe, we were lucky we're sort of the tail end. But we reacted very quickly to ensuring that we locked down our people, and we made sure they're safe. I mean they -- by the time we got into April, I mean, we'd completely changed the way that we work. We're changing the way we behave socially, the way we looked to people. If someone coughed in the street, you'd cross the road. I mean, I don't know anyone recently that's had a cold. I think that hygiene has certainly improved. So there's a lot of good things that have come out of it. There's a long way to go for us, but we're probably -- right now, we're probably in the best place in the world for -- to live and to work, to raise a family. I mean, we're probably in one of the safest pieces of dirt on the planet. And I think, look, thanks to Mark McGowan and his team, they produced probably the best economic and social outcome that anyone could wish for. I mean for us to be able to do this today, I think, is exceptional. It's rare. Obviously, there's a lot of people out there. There's probably about 8% of the population, I believe, they'd like to see the borders open. The other 92% of us are about to be able to see us going out for dinner and going and seeing our mums and dads and relations and being able to go to work and make sure that we look after our kids and we educate them. So I encourage Mark McGowan to keep running the place exactly the way he has. Welcome to my fellow Board members present, Kelvin and James. Thanks for everything you've done during the year. It's been another outstanding year, and the skill sets that they bring to us has been exceptional. Peter Wade, my Chairman, who's been around the business for a long time, and he knows it extremely well. He may not be an Independent Chairman. He's actually better than that. He's a Chairman that has passion for the business, and he knows exactly how it works from the ground up. Susie, who's sitting in Hong Kong -- sorry, Xi Xi sitting in Hong Kong, and we haven't seen Xi Xi for some months. Xi Xi's been incredible help to us. She specializes in commodity, and she understands exactly where to place around the world. And well done, Susie Corlett, for joining us, and I'm really looking forward to having her skill set come on the Board. It's going to be exceptional because Susie not only understands the commercial side of business and the funding side, she understands what's under the ground. She's very clever in geology, and that's going to be a big part of our future over the next 3 to 5 years. So just -- if some of the shareholders out there are wondering why we lifted our remuneration from $1 million to $2 million, it might be worth bearing in mind that the savings that we have in this company, I mean, we probably billed about $3 billion here, it's probably going to be more than that going forward. Our fuel bill that we're trying as hard as we can to reduce, our diesel bill runs about $280 million a year. If I can take 1% of that this year, that's probably 3x what it costs for my entire Board. And the wealth and knowledge they bring to me, it's kind of relative. So the amount that we pay our Board is very minimal for the experience that we get, as most boards are. But we have an exceptional Board. So thanks, everyone. Look, I'm going to give -- run you through quickly through the past year. We've got a little story to show you about how we dealt with COVID. It was something that's probably one of the single most important things this business has ever done in its history, and I'm extremely proud of how our people were able to react to it so quickly. We'll have a quick look at some high -- some of the numbers that we produced during the year, which were quite good. And then I'll tell you through the growth of the business and where I want to take it over the next 3 to 5 years. As I said, the extraordinary year we've been through, no one knew what was coming at us. It was unpredictable. The expectation that we were given around March, April, that was the world was going to lose millions of lives. It was almost certain that we were going to have a depression. Based on that, we were looking back at the Great Depression, the Second World War. We had a look at the Spanish flu, and we thought the only thing that we can do, the only thing we need to focus on doing here is making sure that we can make sure none of our people get the virus. How do we do that? We went to the U.S., and we procured some high-quality PCR testing machines from an amazing organization called Thermo Fisher in New York. They make the best equipment in the world. They are the most accurate test you can get. We secured them, got them out of the U.S. It was a little bit like a movie actually, getting the things out. The airlines were shutting down. Donald Trump was saying they shouldn't be leaving. And we got them out, got them into Australia. We'd set up 3 drive-through facilities in Perth and 7 in regional centers. And we were -- we engaged 40 nurses. We brought on 2 world-class labs on board, and we had the capability of testing 10,000 people a day. It is probably the largest and most sophisticated private PCR COVID-19 screening program in Australia, and it was there to test everybody that was going to our mine sites originally. We then expanded that to the mining industry, and we had about 60 mining and oil and gas companies all running through the facility, making sure that everyone got on planes, done so without the virus, which meant that they could go back to their normal rosters. We got our people back to our normal rosters. We turned them off for a couple of weeks. We got them straight back. I mean the worst thing you can do in these situations is have your people away from their loved ones and their families when they're most needed. So we kept them on those rosters. We kept everyone tuned in. We engaged some mental help in the services of Chris Harris that joined us, and we made sure that our people were physically and mentally fit and able to go to work. And that any help their families needed, we were there for it. The government was exceptional in protecting WA from COVID. They eliminated community transmissions. The economy is a powerhouse, and life is reasonably normal here in WA. So we put together a little movie that I'll get them to roll now and just show you a little bit of background on what we did during COVID. [Presentation]

Thanks. It was an extraordinary time. We lived and breathed it every day. But thanks to the staff, I mean, they were unrelenting. It didn't matter how many hours, how many days they had to put in. They were there. But look, thankfully, it seems to have left our state, with the exception of those that come in uncontrolled. So the borders are softening a bit. As I said earlier, I think from our point of view, I mean, it's tough for us to get people in and to get our labor. And we've got the interstate people, and we've had to put them up in Perth and look after them. And we got people locked out, which we're doing all sorts of things to get them. We're now paying our people to fly back in. We're paying them to spend the 2 weeks in quarantine and doing all those things just to try and keep our people going. I mean it's not been a cheap exercise, but it's not about that. I think it's about the humanity of being able to keep our workforce, those people that supported this business a long time. I'm proud to say that we've kept them all intact and their families. So we're backed off on the testing just recently. We're no longer testing 100% of people that go to site. We're randomly testing some of the ones on all of the sites and just making sure that we're looking out for all those signs that we do. And we're also making sure, obviously, that if WA is relatively free from it at the moment, and if we have an outbreak, we have got everything in place. We've got all our medical staff in place. We've got all that amazing equipment sitting there. And look, I've got to thank also Mal Beacham from SafeWork Labs that you saw on the screen, also Shae Seymour, they were just incredible. I mean, to do things at our speed, I mean, it's not something they're used to, and like at the time it normally takes, I mean the virus would have had a hold of WA. So they learned how to go mining with their labs, and they went along with the flow and we got it done. I also have to especially thank Stephen Pickering. So he's the Vice President of Thermo Fisher for Australia. He's the guy I rang up and declared amnesty to and said, "I've actually bought a whole bunch of equipment out of the States, and I bypassed you. I've got it all over here, and we're trying to set it up. And it's got this calibration plate that can't fall below minus 37 degrees C, and we're trying to figure out how to calibrate them." And he said, "What are you doing with our machines? How did you get a hold of them?" And -- I can't tell you that. And I said, "I've got a little bit of reagent, but I'm going to need a truckload of reagent." He said, "Hang on, I'll call you." He called me back in about an hour, and he said, "If you're doing it for nonprofit and you're doing it, as you say, to try and make sure the mining industry stays intact," he said, "I'll throw in my A team." And he did. And when the whole world was scrambling for reagent, we just had it coming out our ears. We had the latest and the best reagent and as much as we needed, and we went. So that guy was exceptional. If you need testing gear, they're the only game in the world. They're amazing. Highlights for the year. We delivered, obviously, our best result ever. The most important thing, as I said earlier, that we achieved was that we kept everybody safe. We kept everyone employed. We told them to go home and tell their spouses, they've got a job. This thing will not reduce their pay. Go tell your husbands and wives, you've got a job. The mortgage is paid. The kids are safe. Now get back to f****** work as we're going to get into it and get busy and make some money. And we did. We had an amazing year. We went from trying to survive to we absolutely thrived. I mean, we grew the business. We added more than 500 people. We've added to our business in permanent long-term jobs this calendar year alone. That alone has been tough. Our HR team have been bleeding. We have been up on our EBITDA, 77%. Revenue is up 41%. Return on investing capital was a whopping 49.6%. We paid a $1 for the full year. The mining services production was up 65%. Iron ore exports, 14.1 million tonnes. The lithium was a sadder story. The COVID kind of destroyed demand. There was a bit of an oversupply when we went into COVID, and then along came all the factories around the world that shut. So demand sort of went through the floor. But in saying that, we kept Mt. Marion. It's probably the only mine in the world, lithium mine, that didn't just run at full production. We increased the production and reduced the cost. And our Kemerton plant, that we're about to take 40% ownership next year, has continued under construction extremely well. So I do want to just acknowledge that 2 shareholders that have been here from the beginning for every shareholding. Brad Shallard that supported us from day 1 and on the vote. I need to just mention, I mean, and supported our stock ever since, [ David Bowden ]. [ Dave ], a true shareholder, he's probably -- still got all the shares you've ever had, [ David ]?

Yes.

Been to every AGM. I mean that's the sort of shareholders we want in this business. Amazing. Thank you. Just to give you a bit of a snapshot about Mineral Resources. If you do or don't know what we do, we're a diversified mining service business at heart. We're contractors at heart, but we also own a little bit of commodity. We're West Australian-based. We're Perth headquartered. Most of our operations are right here in WA. Australia, obviously, it's probably the best place in the world to live. It's politically stable. It's got high-quality governance. And the level of social acceptability in the mining industry, particularly in WA, is incredibly high. One of the main reasons it's incredibly high is that there's not a lot of people living out there where we go dig our holes. So most families don't want to go and live in the Pilbara Inland where all the dirt comes from. So -- and I think people here are very savvy. And we're probably, I would suggest, the best miners in the world in Western Australia. The industry knows how to get things done. They know how to do it safely. They know how to do it efficiently. We know how to control our costs. We know how to do a lot of amazing things. There's some great gold mining companies out there, a whole bunch of different things happen right here in WA. We're the biggest in the world in iron ore, the biggest in LNG, and we certainly rank in metals like gold, alumina, lithium. Of course, mineral sands, we're very strong. Mineral Resources is regarded as one of the highest quality mining services business in the country. We have a reputation that we not just protect passionately, but we've grown year-on-year. We work hard on our culture, how we act, how we behave, how we treat the community. All of those things are incredibly important to us, and we've been able to grow that year-on-year. So we're building a 30- to 50-year business, and we're very strong in a mix of what we do. We're trying to drought proof the business. So we're into services, commodities and infrastructure assets. Infrastructure, it's going to be a big, big part of our business going forward over the next 3, 4 years. That's our biggest focus. Geographically spread on iron ore, we've got a mine in the north and 1 in the south. We're #5 in Australia as an iron ore miner. Lithium, again, in the North and the South, 2 different weather climates. We're #4 in the world as a lithium producer. We have the largest hard rock deposit in the world in Wodgina. We have an exceptional deposit down at Mt. Marion out near Kalgoorlie. Our Mining Services business is significant. We're the biggest crushing contractor in the world. We make more little rocks out of big rocks than anyone else out there makes. We also have all of the other toys that go with it. We're very good on drill and blast and mining, and we own and operate airports. We own our own railway systems. We've got monster road trains. We got the largest road trains in the world. We're addressing critical risks for our long-term energy security, and we are addressing our carbon footprint. We'll talk a lot more about that going forward. We haven't been vocal on it, but we are certainly all over it. We have scale in mining services, iron ore and lithium. We're a growing organization that's recognized, and we have a good voice in the mining industry, and it's getting quite respected. Our '20 performance. Safety, another great year. As I said earlier, we put on more than 500 new people we brought into our business. It's a tough chore. You're bringing new people in. Outsiders, they don't understand how important that safety culture is to us the day they come in. We work hard to make sure that they come in safely. They understand it. They're trained well. They pick up on it. We've got over 3,800 full-time people nowadays. Our safety ranks in the top 10% of the mining industry. In the mining services industry, we're probably in the top 3%. Our lost-time injury frequency rate is 0. So in -- to understand, that means we haven't, over the last couple of years, had 1 single person that's had an injury that's caused them to have a full 8-hour shift off work. Extraordinary, when you consider the industry we're in. I've mentioned to some of the regulators out there that they have lost-time injuries. They're the regulators that sit behind desks and measure our safety. They actually have lost-time injuries. And what we call our TRIFR, total recordable injury frequency rate, I have to get my wife to keep reminding me what that means. Thank you, Tia. We're in the bottom quartile of the industry. This is a slide from James. James likes this. It shows our shareholder value creation. Our unique capabilities and business model have created solid shareholder value over the last 15 or 16 years. We've generated high returns. Our return on invested capital has averaged 27% per annum since listing, which is extraordinary. There's only a couple of companies on the ASX that have actually achieved that. Our operating cash flow has grown significantly. $5.8 billion EBITDA has been delivered, and it allows dividends to grow, 19% per annum fully franked. We maintain a very conservative balance sheet. We got out there a little bit 1.5 years ago when I was building Wodgina, but it was planned and it was well managed. The market has recognized this in our share price over a long period of time. Our share price has been, I think, fairly well performed over the years. We've had times where it's a little bit softer than I think. And I think probably now, we don't get a lot of recognition for those great assets we've got in the lithium. I think we're probably more weighted to our mining services and iron ore. But over the next year or 2, I think that will be able to balance and come back. All important on sustainability, a big subject in the mining industry and right across Australia at the moment. I mean, we're, of course, focused on increasing our diversity across our business. It's tough. We're employing a lot of people in a small population. WA is a huge continent, 2.5 million people, and we're trying to employ a whole range of different people here. And we're competing with a lot of different organizations, but we're doing well. We are moving in the right direction. We're also looking very hard -- we've increased what we call our second-generation MRL employees. So a second-gen person is their mom or dad works for the company. And if they work for the company, they get priority because they've grown up around the breakfast table. They understand the culture and how we work, how we behave. They understand the passion their parents have for the business. So we've added 15 apprentices also this year. We got 34 in total at the moment on the books and growing. 13 are second generation. We've took -- taken in 44 trainees this year and graduates. 23 of those 44 are second generation. Actually, on the trainees, more than half of those are female. I had the pleasure of going along to a training program we were running a few weeks back, and we had 20 of our young women, next-gen women in there learning how to drive dump trucks. They've never been to a mine site before. They're all out there now working on the mines, all except one. One went, this is scary. But the rest of them are still out there. So the success rate's very high. Emissions, we're obviously very focused on reducing our emissions. Our prime focus, it's very basic, very simple: we have to reduce the volume of diesel that we're burning. That's our single most important focus. So changing our power stations, changing our trucks, our road trains. As I said earlier, we're probably going to burn in excess of $270 million worth of diesel this year. And when you consider we buy ours for about half the price you guys pay for it on the road, it's an awful lot of diesel. How are we doing that? So all of our power is going to be gas generated. Most of the big ones already are. If they're on the coast, natural gas at the inland, we're going to have LNG, which we will create through many LNG plants. We'll haul them inland. And on the bigger projects that I'm going to talk about shortly going forward, both on the coast and inland, we're going to plant farms and acres and acres of solar panels. And we're going to try and run as much of our operation on solar during the day. We're obviously also looking closely at hydrogen. That's a little ways off. But there's an awful lot more focus behind the whole world now, 10 or 20x more than there was a year ago on trying to get clean energy to work. And we're on board with it. And our contribution to safety. During COVID, we've kept everyone employed. We've received 0 financial benefits from the government. We haven't asked for them, and we don't want them. We can look after ourselves, and we do that well. We've increased our payments to the federal and state and local governments. Our total payments over the last 5 years are over $850 million. And we have provided the best testing facilities in the country to keep West Australian's mining and oil and gas industry safe and keep them at work. Our business performance briefly. The mining services, all the sites have delivered strongly. The production is up 65%. EBITDA is up 72%. We've had 2 new contracts and 4 renewed contracts during the year. Customer retention remains extremely high. We operate across 28 sites. Every site that we have out there has met or increased expectations, and our expectations are high. I mean, we push our plants. We push our plants, the tonnes that we expect to deliver, and we focus on them. I know every day, every morning when I wake up, I know what every site's produced or if there's an issue with any site. Within an hour if somebody gets hurt, I know and my senior guys over here, Paul and Mike, will be onto it within minutes. Those things are critical to us. Iron ore exports. It was a record year for our iron ore, mainly thanks to Kooly and getting Koolyanobbing up and running. Our revenue per tonne has increased. Obviously, we all know the price of iron ore has gone up. But so, too, has our all-up CFR unit costs, have grown over the last year. A couple of reasons for that is, the more you sell it for, the higher the royalties are that we have to pay out. So the royalty costs have gone up. And then Iron Valley, we're getting very deep in the pit out there, still got a long, long way to go. And we've got wet feet. The waters in and we're pumping water. Lithium prices, as I said earlier, they're down. Mt. Marion's reduced operating costs and increased production. Production is up 16%. Wodgina's on care and maintenance. And our Kemerton hydroxide plant, which is being funded and built by Albemarle, is on schedule for commissioning next year. Okay. So where am I going to take the business into the future? We got some fairly good plans around where we're going. This was a good year. We got better years to come. We've got some fairly solid plans. We've been working hard on getting agreements in place. We've been getting approvals done. We have assurances from all of the right departments, government, port, landowners, traditional landowners, that these projects that we got in front of us, I'm going to tell you about now, are going to work. The strategy is to own and operate long-term sustainable infrastructure. That's where we want to make our money. We are, remember, a mining services at heart, first and foremost. But when you have all the infrastructure, you have to have passengers for it. Our most reliable passengers going forward over the next decade are going to be iron ore and lithium. I said, I think, at the last AGM that we thought that we would double our Mining Services business over the preceding 3 years. We're going to be there in 2. We've had some big gains so far, and we've got more coming. We believe without any doubt that over the next 2.5 to 3 years, we're going to double the entire MinRes business. So that's doubling in revenue, doubling probably in the number of people we employ, the tonnes we shift and more importantly, doubling the bottom line. As I said, we will build and operate infrastructure assets, mainly in the north of the state, although we got some expansion happening down in the Yilgarn. And that's mainly going to run through Port Hedland and Onslow. These supply chains will provide a pathway to market the stranded tonnes and uneconomic deposits, and there are several billion tonnes sitting out in those regions that are stranded. When I say stranded, that means that they've got no way to get them to the coast and get them to market. We'll build private haul roads for these 300 tonne capacity off-highway road trains that we've been developing over the last couple of years. We've actually got the first couple of them out on-site now on the Yilgarn, and we've been able to prove that these things are meeting the rate per tonne per kilometer that we expect. So if you compare them to our road trains and off hauling down the highway into Port Hedland, these big girls, we have to build our own highways, so dedicated just for the trucks. So then there's no diesel fuel tax. There's no one else on the road. We're about 1/3 of the cost per tonne kilometer as we are on the on-highway truck. So we're getting down very, very close to the total cost of running a train, if you include the capital for building the track and buying the train, which they never do. We're right down close to that, and we're working on getting the drivers out of these trucks and getting them driverless because there is no one else on the road, and we're just going to try and get rid of that. We'll also build and own and operate our own transhippers in the Port of Ashburton. So the transhippers are basically boats that have got 15,000 to 18,000 tonne capacity. They just go in circles from shore out to capesize carriers sitting about 20 miles off the coast and load them. It's a very low cost to be able to do that. It's actually, if I can quote you the cost of doing that, out of Onslow is about half the cost of using the Utah Point government-owned port facility in Port Hedland. And once we get them on board the boat, again, the cost of a cape carrier compared to the mini capes out of Utah Point is about 60% thereof. So incredibly economic to do what we're going to do. So the Yilgarn hub just briefly. There's substantial stranded deposits down on the Yilgarn we're working through. We're developing haul roads down there. We put in about 130, 140 [ Ks ] over the last 12 months of haul roads. We got some more to go, but we're going to get it to a consistent run rate. It's got at least a decade in it at about 13 million tonne a year running. Kooly will be doing 9 million tonnes, and the Carina mine site or infrastructure site's going to be doing 4 million. We're turning Carina back on. Carina is, if you remember, an iron ore mine we run a few years ago, incredibly high-quality infrastructure assets sitting down there. So the process plant, the camp airport that will take bitumized airport that lands jets and automated train load out is all coming back online over the next couple of months. So 13 million tonne out of there consistently, most of that going through Esperance. We're going to get a few of those tonnes probably to go back up through Kwinana, so that we can get them on smaller ships and get them up the rivers into smaller process plants in Southern China. Utah Point strategy. We've mapped out what we're doing there over the next decade. We're going to be hitting up there about February next year. We're aiming to be around 14 million tonnes a year, consistent run rate again. We've got a fairly solid 10-year plan wrapped around that. It's coming out of about 5 deposits at the moment, that may grow to 6 or 7. We have recently acquired a little mine up there called the Wonmunna site. We got it from the Australian Aboriginal Mining Corp. They had some unfortunate experience over the last 5 years. They weren't able to get it going with their JV partner. They approached us only a few months ago, and we have put an agreement together with them. We've given them some money. They were getting in serious financial trouble. We bailed them out, funded them with that. And we're going to turn that mine site on, and we'll have first ore in Port Hedland in January. So a very favorable outcome with that, and we'll be running at about 5 million tonne run rate out of there initially with quite a good grade, which will add nicely to our Utah blend. And the Ashburton infrastructure development. So fundamentally, what we're going to do down there, we're going to build a fully enclosed 350,000 tonne storage facility right on the edge of the ocean in Ashburton to south of Onslow. We're going to have berthing facilities in there for the transhippers. We're going to have a fleet of 3 to 4 transhippers, which we'll purpose built. And we'll deliver them out to the cape carriers offshore. On the inland, we'll run a couple of hundred kilometers of privately owned haul road. We'll have state-of-the-art accommodation inland. We'll have an airport. And we're going to have a couple of our next-gen process plants in there, 15 million tonnes of piece. And we will be able to produce a minimum of 25 million tonne a year run rate out of there, and we are aiming to have that running within about 2 years from now. We're well down the path of getting approvals and getting the support from all of the right agencies we need. And then, of course, power in there, it will be natural gas out at the port. And it will be LNG inland to run the mine sites. And then as I said earlier, we're going to supplement through the day with the solar farms. And we're going to keep an eye on other fuels, other green fuels that will be able to be added as we go by. But I think if we take the easy steps now and get out of as much diesel as we can get into gas, that's a very quick fix. And then, of course, we are a big supplier to the world of lithium. And we're going to take credit for that because we're saving a lot of carbon credits with that. So if you want lithium, call me and we'll sell you as much as we want. And then South West Creek. We've been working on that for a couple of years, and that's 2 cape carrier berths. They were allocated to what they called back in 2008 the juniors. They all disappeared, except us. We're the only organization left that meet the criteria under the policy. And we're the only emerging iron ore producer that has the balance sheet and the financial clout to be able to deliver those. We are waiting for final sign-off. It's all on the Minister's desk. So we hope to be able to get that in the foreseeable future. I think the election may interfere with that. But those 2 berths have a 50 million tonnes of channel capacity in the Port Hedland Harbor, which is the biggest bulk harbor in the world. And it would be a nice place for us to have that asset. So we're looking forward to getting that secured in the near term. So that kind of wraps it up. I mean the lithium business, as I said, it's sort of the poor man at the moment. I mean a couple of years ago, we were all standing here and applauding and doing bows because we were heroes. But now we're in the gutter with it, but not totally because if you look down the track over the next 10, 15 years, if you have a look, I just noticed the countries out in Europe that are saying come 2030 and 2035, there will be no more combustion engines on the road. So we're going to have to power them somehow. Right now, lithium is one of the front runners of it. You can feel the demand is incrementally coming back now month by month. And as I said, we have a significant lithium business. Our business probably sits in the top 4 lithium businesses in the world. The prices have declined over recent times, but we've reacted with that well. We've continued with Mt. Marion. I mean we've really pulled the cost down there. We're probably -- our production this year is probably going to be up around the 475,000 tonnes mark. We're up -- going to be up around 20%, and our costs are going to be down at least 10% to 15%. And we're probably going to do better than that. So good outcome with that. We'll leave Wodgina on care and maintenance regime. Wodgina is a state-of-the-art plant. It's a big, robust plant. It's got naturally gas-fired power station. When we turn that thing on, it's probably capable of better than 1 million tonnes a year run rate that it can pop out, but we can turn that on incrementally. It has 3 trains. We can economically bring on a train at a time. So I mean that big girl's sitting ready to go. Kemerton is looking extremely good, Albemarle delivering a 50,000 tonne plant down there. When they commission it, they then give us our 40% shareholding, and we join in as a JV partner. They tell us that they have all of their product taken care of. They're in charge of the marketing, and they say that they have all that spoken for. So about June next year, train 1 comes online. About October, November, train 2 comes online. These things take some time to settle in. They're chemical plants. So it's probably going to take a year or so for it to gradually build up to full nameplate. But again, a great asset and a great partner, as is Ganfeng. So that's gone well. Just before I wrap up, big thanks to [ Diana ] and the team for putting all this together. She puts up with me every 6 months. This is a tough one for us. So she's probably taken a couple of tablets this morning, but she does a bloody good job. Thank you. Russell James, our rock star from New York and his wife, Ali Franco. Russell captured all of the COVID moments all through the COVID. He's -- Ali and Russell have been stuck in Perth for months. So we've had them out around photographing all of our sites and capturing all of these great moments so that we can try and record what happened. We didn't know what was going to happen, but all the pictures you see here, they would normally be on some magazine in New York or somewhere on the front of Swimsuit (sic) [ Sports ] Illustrated, and we may even get one of our plants there. But Russ and Ali, thank you for everything you've done. The Eagles. Thank you for The Eagles. They brought some normality to do our sites. Peter Rowsthorn brought some humor to us, and we had all this engaged. Thanks very much, Mark and Paul and Mike and the teams, and how you drove your teams and how you got the results that you drove this year, both culturally and safety and the profitability for our shareholders is highly acknowledged. So thanks to all of this. And we're open for questions. If I've left anything out, now is a good time.

I've got a couple of written questions, I'll just cover quickly. Someone has asked us, why isn't the income from mining ore separately produced? The answer is, it is. It's separate. It's in our financial statements. So if you go to our annual report and you turn to Page 85 and you have a look at note 3, you'll find the information you need there. Has there been any study into even time rosters? I'm thinking this is one of our people that's got shares. Of course, there has. I mean we look at -- the rosters that we run for our people, we look at that from a mental health point of view, and we look at it from a financial point of view and of costs, and we look at it from a financial point of view for our people. The vast majority of our people that we have, and I'd say, the vast majority, and they're like 90% plus, like the rosters that we run. But in saying that, probably going forward, when we develop these larger sites, and the first one is going to be running within a couple of years, we'll probably be looking at different rosters on that site so that we can have a mix. And people that want to go to even time roster, they get paid a bit less, but they get home a bit more. So yes, the answer is we're addressing that, and we're going to come up with some good solutions. We have some other interim solutions in between as well that we're working on. And we're also looking at a whole range of other benefits that we can include into the packages. One thing we have learned out of this is that how we look after our people. Today is extremely different to what it was 9, 12 months ago. I mean how we think about their health, how we think about their physical and mental health as well as their safety is very different. We've got 40 nurses on board now. We're going to keep them. We have them out on our sites. We have them in town, and we're looking at the well-being and health of our people. When we move into our new office that we're currently fitting out in Osborne Park, we got 15,000 square meters of office out there, and it's going to be state-of-the-art Google style. We're going to have our own doctors on board. So we do all of our own medical work in-house, and we can be able to get our people to medical attention immediately. So the last question I have is, what will the share price be in 2021? So we're not allowed to answer that. But if I could, I probably wouldn't be here. So that's pretty much it. Has anyone else got any questions? Or did I do a good job on delivering all the information you need? Put your hand up.

Thank you. Look, I commend you for your impressive growth this year and your COVID response. So I think all that's great. I'm interested in a couple of things. I have a couple of questions. The first is about, given what we've seen with Rio Tinto, I'd just like you to talk a bit more to native title and how that affects Mineral Resources. The other question is just about markets. Given the increasing awkwardnesses in between -- with the Chinese government, how exposed are shareholders or Mineral Resources to the Chinese market?

Yes. Look, 2 very good questions. The -- looking after the assets of our indigenous folks, I think it's something that the mining industry has done extremely well for a long, long time. I think, as Ben Wyatt would clearly say, there's a lot of areas in there for improvement. And as an organization, as a body, the mining industry is working with the government now to try and fill those gaps. And we certainly recognize there's a lot of things that should have and can be done to make sure those sorts of issues don't happen. And look, I mean, to be clear, I mean, it's one issue that's happened. It didn't happen on purpose. It was just a series of events that brought that to bear. But we want to make sure that, that can never happen again. We have watched -- we have 14 [ S18s ] that exist. We treat them as we always have. We're not doing anything different because I think we were doing enough. We make sure that we collaborate with the local indigenous people and with the traditional landowners. And those regions that we're in, we make sure we get the right people out there on the ground, and we get the right answers and the right conclusions. And then we make sure that we do exactly as we say. And we deliver. I mean that's part of the reputation of our business. It's not just delivering with traditional landowners. It's also delivering with station owners, the local communities. I mean I personally have been up to Onslow in the last few weeks. I've met with the traditional owners. I've met with the farmers. I've sat out on their balcony and had tea with them and spoke about what we will do. And I hear -- these are the commitments from the top of the company we will deliver. So those are really critical to us. And it doesn't matter who it is. It's anyone in the community has to have that same respect treated to them. In terms of China, I have personal views on how we should treat our trading partners. But I mean, look, they are not looking at Australia as one of their closest companions at the moment. I think we're fortunate. West Australia has always had the highest respect. Our Premier visits China once or twice a year, as does some of his key staff and continually tells them how important our trade is between each of us and the relationship that we've built over many years. So it's fragile at the moment, there's no doubt about that. Are we at risk? Of course, there's always a risk. Australia's lucky in the sense it's sending out about 850 million tonne a year up to China. They need that, but that's no good reason for us to have the relationship we've got. In terms of our lithium, we've got all of our Mt. Marion lithium going to China. That's jointly owned by a great Chinese company, Ganfeng. So they take it to China. They downstream it in China. I think that's fairly rock-solid, and our partners with at Albemarle, American, of course, and we're aiming to try and process a lot of our product down through the Kemerton plant that we're building. And we're probably looking at building some other plants in other regions. So one of the things in our lithium business we're looking to do is, in the immediate term, we're looking to be able to develop more hydroxide. And we pretty much want all our spod to go through our own hydroxide plants, whether that be JV owned with Ganfeng or Albemarle. But there is no doubt that if we were selling a product to China at the moment that they could get from 2 or 3 other countries, we would probably be the last in line. Anyone else? Anyone out there know what the share price is going to be next year? "Chris, you continue to run a fantastic business," thank you for that, "FY '20 and the manner in which you supported your staff and stakeholders through COVID-19. With regard to development of Kumina and Bungaroo, are there any efficiencies available to MRL for shared port access at Mardie?" I'm thinking that someone out there that's in the salt business has sent that through. No. Look, there is -- the answer to that is no. I mean we're fixed on Onslow for transshipping because the facilities that are available there, we have a clear understanding of what the capital cost is to get out of there and what the operating cost is. But no, look, it's -- Mardie is too difficult in the sense of being able to get there with the product and be able to build the facilities we need and run the tonnes we need. Oh, god. "Chris, last year, you said, 'I was keen to get an EV in the garage.' Did you find time for that?" Can we share -- okay. So the answer to that is, I did say last year that I should be driving an electric vehicle. And I'll be heavily criticized when I get home because I've been encouraged to get one, I just haven't had time to get one with all the stuff we're doing. And that's poor excuse because we've actually got a lot done this year, but I just haven't bought an electric vehicle. But I can -- but when I'm standing here next year, I commit that I will have one -- two. Anyone else? Is Albemarle financially able to complete Kemerton and without further dollars input from MIN? They are very sound on financially to be able to finish not just Kemerton, they're also building in Chile. They had the money set aside from it. They're an awfully well-managed organization, and they've got a very solid Board behind them and management team. But yes, they need no help from MinRes. Okay. "So at the last year's AGM, Mr. Wade, you spoke of a choice between diesel and gas. And you hoped that someone will come up with an emissions-free fuel source. With some of our peers like Fortescue making major commitments to renewable energy, being green hydrogen, will Mineral Resources consider its plans to move into gas development?" We're there. We have been ahead of FMG. We had some great land up in the Perth Basin. We were planning on drilling that out. And a drill hole out there is about $15 million. Our person in charge of our gas is here, Shelley Robertson, sitting over in the back, who's done an amazing job for us. And so we are going to. Sometime in the next 7 months, 8 months, our aim is to drill a hole. It's about a $15 million hole. We're in a highly prospective area. If we don't find it there, we're going to drill another one. We intend to own our own natural gas, and we'll be able to do make sure we know what that cost is fixed for the next 30, 40 years out in our business. We've spent some money on hydrogen. And we're doing -- and Shelley has done a whole bunch of studies on exactly what we're going to build in terms of solar up and right through the Pilbara, what we're adding. And she's adding solar and as we speak down on the Yilgarn at Mt. Marion. So we are full on doing it. We're just not very good at being able to share that information. But I promise you within the next 6 months, we'll get a much larger plan out on what we're doing about our carbon footprint and what we're doing about our reduction in fuels that don't -- are not conducive for the planet. Are we looking to expand our lithium footprint through acquisition? We keep an eye out, not just for lithium. Look, we keep an eye out for the commodities that are of interest to us. So if there was something that came along, we would certainly have a look at it. I'm not saying we're actively out there looking to buy lithium at the moment, but we're certainly actively looking at how to turn our spod into hydroxide. We're looking at that jointly with our partners, and we've been working on that for 3 or 4 months. And we hope to get a result in that shortly. We have an awful lot of lithium in the ground. I mean you've got to remember with Wodgina, we've got something like 270 million tonnes in the ground. And we're not even halfway down that pit. I mean, we were going to drop a drill rod, a kilometer or 1.2 Ks down. We're only 500 meters down in the pit. So we have more lithium than God, I think. Okay. In the annual report, the synthetic pilot plant we developed put out successfully a run rate of 96% pure graphene, exceeding initial expectations. Out next step is to build a commercial plant? No, no. At this stage, we're not going any further with that plant. We need to do more R&D to be able to upscale it. And we're just -- the feeling we're getting is that there's more -- a lot of people out there are experimenting with this sort of product. And with the time that we got on our hands and the commitments we got on our hands, we just aren't able to get at all of the things. The other one that we're not getting at, of course, that no one's raised is the carbon fiber trays. I mean we're -- we've farmed them across to our original partner. He's working on them. We're working on some other carbon fiber products. And we think we're close to turning out our first product, which is probably a bigger cash saver to us than the dump truck trays were. But again, it just comes down to the resources that we've got. We can only do so much inside our business. Someone from Melbourne would like to know if I'll consider a sponsorship for the Richmond Tigers. Is anyone in this room, anyone at all that would support that? No. You did. Okay. So I've got someone here asking about our emissions and intensity and what we're doing about it and when we're going to publish something about it. I will promise, we will commit to publishing something quite significant on all of that within the next 6 months. I mean, as I've said, we've been working through a whole range of areas. And at the same time, we're trying to get projects on the board that we're going to develop. Now that we know what we're going to develop, we'll figure out how we're going to power them. So we do have a good plan on how we're going to reduce our emissions. So give us an opportunity to do that. So energy resources, that's Shelley, who is developing not just our gas assets in the Perth Basin. We've looked at -- we've put in other exploration permits or opportunities we've been looking at, but she's also very engaged in all of the power that the business is either running currently, and she runs it, or what we intend to run. So we will have a fairly solid plan on that, Shelley, within the next 6 months. I mean, we're pretty much there now, but she's got quite a team working on it. But we're close. How concerned am I about China owning iron ore mines in Africa? Not at all. I mean it's a given that they're going to. They do have ownership in Guinea and Simandou. They will develop them. There's no question about that. They are very high-quality grade deposits. They're at 66% plus. They're also challenging. They're in a third world country. And I mean -- don't need to be concerned about that. China has capability of building pretty much anything anywhere. I mean they are very well versed at how to fund and work with Chinese governments -- African governments, and they can build in those zones. They can just pick up a whole bunch of their people and take them. They will build mines at Simandou, and they'll bring them on board. It may take them 5 or 6 or 7 years to do that, but they will bring them on board. There's no doubt about that. But if they can get something running and they got 100 million tonnes coming out of there, that's a reasonable challenge, but they'll achieve it. But I think that we've got a reasonable degree of safety in terms of MinRes for the next decade. Okay. So that was what I was talking about earlier. So the U.K. has just recently come out and said they're going to ban combustion engine diesel and petrol engines off the roads. What's the impact of that? I hope it's huge. I hope that they just want to burn lithium, only run batteries, no hydroxide required. I think -- look, I think the fact that, that sort of news flow is coming out, I think that's a combination of people waking up in the middle of COVID and going, "We've got no pollution." I mean they turned off all of the factories that were creating pollution all through Europe everywhere. And everyone went, "You can actually live in a pollution-free world." So I think there's a lot more focus on that now, and there's a lot more drive. Obviously, you can feel the pressure now. I mean if someone said to me 3 or 4 years ago, does the cheap coal mine going to go, well, we're in there. But today, you just wouldn't want to walk past one. So we're all into clean fuel. We've just got to find how we get. There's not a lot of options at the moment. Given a year, 18 months, there will be. Are we looking to increase our lithium asset reserve? Yes, we are. We are through exploration. We are putting a plan in place right at the moment, and we intend to be drilling holes this financial year and trying to grow that lithium resource that we got. I think we're about done. Anyone want to go and eat some of the amazing food we got out there? Please don't waste it.

Just one last question. Last year, you spoke quite positively about the...

Sorry, you need to talk in the microphone.

Sorry about that. Yes, last year, you spoke quite positively about the BOSS holding system for stranded sites. Any update on that?

Yes. So again, with the BOSS, we had some issues with it, and there were issues around fatigue on the track. At the same time, we were running side-by-side with this road system that we've been working on. So the road system that we have is about identical in terms of cost per tonne per kilometer, but it's much more portable. So to go build a road, a bitumen road, is substantially less in capital cost and the operating cost on these things. So right now, the tracks today run on diesel. We think when we put the first big ones on the road in Ashburton, we think that we should be able to run them on -- worst-case scenario, on gas but maybe on hydrogen. We think within 2 years, we can absolutely take the drivers out of them. So these things are much more portable. So I can put these things down in the Yilgarn, and I've got a couple down there now. I can put them in the Ashburton. We're going to do something very similar out of Port Hedland. So to move these big girls around is very easy, very flexible. And it's the lowest cost form of transport. And we put quite a lot of effort into that BOSS system. It looked promising, but it just -- we had 2 independent experts that we had from internationally. And neither of them could find the solution that we were looking for. So we parked that. So that was narrow, narrow gauge. So we're talking about 600 mil centered at -- center on the rails. If we went out wider, we went to about the standard narrow gauge rail line, that we could make work. But then the cost got beyond these road trains that we've got. I think we're done. Okay. Thanks to my Board. Thanks for joining us, virtual Board and present Board. Thanks to my management, and thanks to all the shareholders and all the support that we've got over the last 12 months and where we're going. Thanks to Bell Potter, thanks to RSM. Thanks to all of the service companies that worked closely with us during the year and helped our business to get to where it is. So it's been a great year, but we've got a couple of better ones coming. So thanks, everyone.