Mineral Resources Limited (MIN) Earnings Call Transcript & Summary

Okay. We're good to go. Good morning. Welcome, everyone, to our annual results presentation, you would have got them online last night, analyzed them. We've had a few tips this morning and e-mails, sort of got a feel for where everyone's at. So look, I'm going to briefly -- I'll briefly run you through where we've been over the year, where we're heading over the next 12 months, there's no 5-year outlook at this point in time. I mean, we're obviously working through incredibly low lithium prices. I mean, just for the record, I mean, no one is making money in this market. I mean, let's be really, really clear on that. There's no lithium companies making money. We're just battering down for the downturn, while we feel like we're dragging our feet along the bottom at the moment. So we're just going to make sure that we throw everything off the deck as we've done many times. I mean, a lot of companies would say that they've been through many cycles, many downturns. I mean, we've got a fairly long-term management team, nonetheleast of myself. I've been through all of the downturns. It's not a fun time. I mean, this is the sh*ttiest time to be the MD of the company. I mean, you've got a really cut the costs out of everything you're doing. You look at every single person. We're doing that. We're throwing everything off the deck just to make sure we conserve cash. And anyone out there in our position, and our position is if you're mining in lithium, you've just got to take those steps. [ John Cap ] is joining me today with the financials, and he'll answer any of your financial questions. Mark could not fly. I mean -- and Mark is fine. He's online listening to us now, but unfortunately, had a quite nasty ear infection. And it was viral. So he just couldn't flow without blowing his eardrum. So -- but Mark's online listening to us. So as I said, look, I'll cover off on where we've been and where we're going. We've had a pretty amazing year. If you take away the fact that if lithium was sitting at $2,500 to $3,000 a tonne, I mean, it would be a much different and better atmosphere. But we've delivered on [indiscernible] in, and we'll show you how we got that done on budget. Contrary to the notes that I'm getting, we got it done on budget. We got it about a month or 6 weeks ahead of time, which is pretty phenomenal. I mean, no one in the last 4 or 5 years since COVID completely wrecked the supply chain worldwide. No one has built a project on time literate on budget, and it's a great project. It's going to be around for a long time. Doubled our mining services business. So we put the foundations in to do that. We've done that in a -- in a number of different ways, which I'll walk you through. But fundamentally, the mining service that comes along with Onslow Iron is significant, and it's completely separate from the ownership and the joint venture of the commodity price. And we're out there. Now we're in the best time we've seen in a long, long time on the mining services front. We're winning more contracts than ever. Sadly, that adds to our CapEx. Every time we win a crushing job, we actually got to go and buy some stuff and we've got to put it on the ground. But you know the net result of that. We've created a fairly phenomenal infrastructure business over the last couple of years. And mining -- most people think of our mining services business here related to dump trucks and the like, it's not. Ours is mainly made up of large long-term infrastructure assets, somewhere around between 70% and 80% of our contracts run from 20 out to 50 years. So I'd prefer to own that than an airport. But I can't get that same price earnings ratio yet. Bald Hill, we track Bald Hill in the mix. We'll talk about that. We've been in there now for about 9 or 10 months, and we're starting to get a feel for it. We sold the Onslow Iron haul road. We got a market cap of $2.6 billion on that. And we've got that sold, and we've found a really great partner in Morgan Stanley. They're very similar in our culture and like-minded. They've got a great team on it. So really happy to have those guys coming on board. And we've discovered an awful lot of gas and oil up in the Perth Basin. I mean, probably some of the best onshore pods in Australia. Business is strong. As I said, challenging times ahead, but we can manage that. It's a day-by-day thing. We manage the business in line with the economic environment that we're sitting in. When iron ore is at $200 a tonne; we're out there building whatever we like. When it's at $100 a tonne; we're not building anything. So -- just a bit of a summary of the year that it's been, it's going to be a lot more fun over the next 6 months. Financials. We've done pretty well. Solid performance were delivered to guidance. We've had record mining services. Revenues up at $5.3 billion, so about 10% up on year-on-year. EBITDA of about $1.1 billion. And of course, the earnings have been dramatically affected by the lithium earnings. No final dividend this year. We choose to make sure that we conserve cash in every front. So shareholders, I'm sure, will be happy for us to conserve that cash and keep it in the bank. ROIC were down this year at 5.3%, but we got $4.8 billion in capital parked and assets that is only just starting to earn. So give me another 12 to 18 months on that when they're all at full earnings and we'll have a very different picture on it. We've invested around about $3 billion of that $4.8 billion has gone into Onslow Iron that is starting to produce. Average ROIC over the past 18 years, we're still sitting at 15%. As you know, 20% is the number that we aim for. And once we get these assets up and running, we're going to be back into a much better number. Total shareholder return, 29% since we listed. So we're still looking after our shareholder's. Safety, people, well-being, critical in our business. We really prioritize that. We're industry leaders. We're in the top 5% in terms of our safety management and statistics, the way we look after our people. TRIFR is slightly up this year, 2.74, which is still down at the very bottom quartile in the mining industry. I mean, it's still a great result, considering we grew over 12 to 15 months. We went from 5,600 people to 8,500 people. So bringing new people in and trying to adjust them, get them to your culture and make sure that they're savvy with our expectations, are looking after themselves. We've done a pretty amazing job on getting that done. We're currently, at the moment, as you know, we're moving out of the Yilgarn progressively between now and Christmas. So we've got about 900 people coming out of there. We had 2,500 people on the Onslow Iron build. And as we wind down off there, we're also winding down out of our head office, we had an announcement a little while back where we're going to move some people on, and we've started doing that progressively. We moved about 140 people out of the Perth office. So there's going to be a downturn in headcount between now and Christmas as we keep going. We're building diverse and really safe environments for all of our people. And particularly, we're really been focused on growing female participation in the business. We've done a whole range of things with that. And we've been really focused on retention of our people over the last 2 years. We've seen about a 50% reduction in people departing MinRes. So we're really starting to nail that down. That's going pretty well. 250 grades trainees and apprentices we've got on the books. Women make up 1/3 of our entry-level programs, including machine operators coming into the business. So, a lot of the women don't have the experience the guys have. So we've got great training programs in there to help them catch up and get in line so they can pick up on promotions. As a matter of interest for anyone that is interested, we've got about 460 of what we call Next Gens. Next Gens means they got a mom or a dad working in the business. We've been doing that for probably about 15 years. They're the ones that are really sticky. They hang around a long time. They get the culture, they've grown up around the breakfast table, understanding what MinRes and the mining industry is all about. So if you've been with us through your years -- 3 years or more and if you've got a kid that wants to do an apprenticeship or a grade at uni, MinRes will take up the cause, and we really hunt them for our payroll. Two of them, of those 460 are mine. Very proud to say that they're following along and a bit of the culture that I tried to breed. Well-being focus is on mental and physical health. We've had -- as you know, we've had a really big focus on mental health over the last few years. We've currently got nine psychologists on the payroll. We've got seven of them running on FIFO. We had a young lady about 3 weeks ago that went home on R-and-R Brisbane and took her own life. So, like anywhere, I mean, all we're doing is we're taking people out of society. We're putting them on our payroll and putting them on the site. There is a whole range of issues out there, and we're trying to make sure that we can do a lot more to be able to prevent that sort of thing. I mean it's gut-wrenching when you see that happening. Head office and Onslow Iron is sort of two of the new areas. We're trying to change the mining industry. Head office is a place that a lot of our people want to be and they love working in there. We've got a lot of different benefits that were brought on. Why have I done all that? Because when I get them first up in the morning, I want to hold them captive all day long. I don't want them leaving the building, and we do that. So I don't want them walking down the road for a cup of coffee. We've kind of figured out a few years how much that costs, wandering out around lunch time. We've got a restaurant in there. We've also got a gym, and we've got other facilities that keeps them glued in there. Recently, and I've had a battle, I had a no work from home policy. I wish everyone else would get on board with that, the sooner the better, but the industry can't afford it. We can't have people working 3 days a week and picking up 5 days a week pay or 4 days. We've now got the industry all heading out there going: "why don't we do a 4-day week? We got used to it over COVID." So, if I can encourage us all to do the same, we're putting in the day here. I found out one of the key things for women, in particular, was that they spend about $180 a day on daycare. And we have -- we're installing one now to take 105 kids and it will cost them about $20 a day. So another reason for them to come and enjoy work, drop the little tykes up next door. We've got doctors on board and nurses. We're going to feed them, but mom and dad will be working in our office. So, Onslow Iron, we've done the same thing. We're really out there trying to make sure, again, getting more women in the workforce. So that means that right now, we've got about 76 couples up there, so far. We've got 750 pods that we're installing in total. We got 500 out of kins. Of those 500, there's about 350 occupied, about 76 couples in them now. So that's working. That's growing in a female population. We'll train them. We'll make them machine operators. Going out, restaurant, tab and pool, all of the good things that we got out there, completely changing the mining industry. MinRes Air, no frequent flyer points available, not even to shareholders. But we started MinRes Air. Why? Because the cost to MinRes has just been ridiculous. We've been losing, over the last 12 months, an average of about 11,000 man hours on changeover on people on different sites. That's not the big number. The big number, tens of millions of dollars we're using, shutting down mining fleets in the middle of a shift and shutting down processing crushing plants so we can change people out. So, literally, I mean tens of millions of dollars. And what can we do about it? The answer is we bring it in-house. We've got two A319s and an A320. We've got a great experienced management team. We've got a couple of hundred years of experience between them in the airline industry. We're running under a license from a company based in Melbourne until we get our own, which we should have around about middle of next year. But we started running from the East Coast and hauling people out of Brisbane. So instead of 1.5 days each way to get people from the East Coast, back. And why the East Coast? 23 million people out there, 3 million in WA. We need a labor pool to draw on. So now it's 5.5 hours direct into our mine sites. So into Wodgina, direct into Kensmore. We are shortly going to be coming into Kambalda. And then, I'm hoping, within about the next 4 weeks, the airline will be in full blast. So we'll be doing all of our FIFO stuff coming out of Perth. But tens of millions of dollars of savings and the cost on doing it. It's pretty much in the first year, it's about cost neutral with what we were going to spend with the airline. So no difference in physical cost but huge difference in our savings and being able to manage that. And we've got to -- as I said, we when we advertise for people to staff that thing, it was insane the number of responses we got. In 48 hours, we had over 640 hostess applying for the job. Why? Because they understand the culture and the caring that we put into our people. Sustainability always at the forefront of what we're doing. We're out there working on it. WA probably the best mining jurisdiction in the world, bar none. I mean, in terms of the way that we understand how to look after the environment, rehabilitation. The care that we give our people. I mean, we're up there in one of the best of the best. So we're working on all of the sustainability that we have to have within the business. I mean it's a fairly major job. We've got a bunch of people that keep working on that. I mean, I keep repeating the thing. We're committed to getting to 0 by 2050, and we're doing everything we can to get there. We're not going to invent any green juice, or anything magic. I mean, we're a mining company. We're out there doing what we can. We are using gas to get out of diesel. Diesel is the main thing that we want that we're focused on. So it's the biggest carbon emitter in the atmosphere. They're getting out of diesel is the priority. Gas is sort of helping us with that. Of course, we're putting in wind farms where we can. We're putting in solar panels by the thousands. They don't help us a huge amount. During the middle of the day in the Pilbara, they tip some power into us, but come four in the afternoon, we're back on those gas plants. So hopefully, someone's going to invent green juice the next 10 or 15 years. Local business is the other thing that we're really focused on with the indigenous communities, and with all the remote communities where we work. We spent $4.8 billion last year with Australian suppliers across -- mainly across WA, but across Australia. $8 million in social investment with charities and 125 charities that we're supporting out there in various ways. So we've been pretty strong on doing that. Just a bit more on the traditional owners. What we do with the traditional landowners around the communities that we work as our aim is to be able to get them to the same standard of living that we have. So making sure they got affordability for decent housing. Medical, education for their kids. So the kids can grow up and have good permanent long-term jobs and eventually run our mines for us, really focused on that. Look, we've got credit facilities in place. We put $25 million credit facilities and with a number of different banks so that they can go borrow money to buy equipment to go and fulfill 5- and 10-year contracts, we give them. So they got these long-term earnings streams, and that we stand behind that. We make sure they buy everything at the right price. We help them maintain it. We maintain it for them a lot. So we're doing a whole bunch of things around that. Education, getting kids to year 12, trying to get them into uni, passionate about trying to make a difference there. A couple of hundred years behind the eight ball, and it's -- but we're getting there. We're making good in rates. John, I will hand over and let you run us through the financials.

Thanks, Chris. Good morning. It's my pleasure to present to you the MinRes financial results for FY '24. It's been another busy year for MinRes. We've been -- we've continued to invest for the future, developing high-quality, long-life assets. And we further demonstrated our ability to recycle capital to fund growth. Starting with the P&L. Underlying EBITDA of $1.57 billion reflects solid underlying performance. Mining Services EBITDA grew by 14% to $550 million. This demonstrates the strength of the MinRes business model. The Commodities, Lithium's underlying EBITDA of $384 million reflects a sharp reduction in lithium prices, despite record volumes. Iron ore underlying EBITDA of $394 million benefited from improved achieved prices. You can see FY '24's depreciation and amortization is higher. This is driven by growth in mine development. And our net financing costs are relatively consistent with FY '23. This reflects capitalized interest costs predominantly relating to Onslow construction. As announced, Yilgarn is moving into care and maintenance from December. We've recognized an associated impairment charge net of tax of $61 million. Alongside other impairments, total impairment charges, net of tax were $99 million. This impairment charge is not part of -- or not reflected in the group's underlying results and there's a reconciliation provided in the appendices. FY '24's adjusted tax excludes the impact of tax arising on nonrecurring transactions. These are transactions linked to the Marble transaction and the ending of the marketing agreement. We had foreign tax losses on sales through China, which have been discontinued. And we had U.S. taxes on battery chemical sales via [indiscernible]. Again, a reconciliation of statutory results as included in the appendix. I won't spend too much time on this slide. The chart shows the strength of operational performance of our business over the year, and you can see controllable EBITDA improve significantly. This was driven by lithium volumes and cost performance; however, more than offset by a significant fall in lithium prices. Turning to cash flow. Consistent with prior years, MinRes has demonstrated its ability to convert profits to cash in FY '24. You will see again a solid operating cash flow of $1.9 billion, impacted by a large positive movement in working capital. This includes $0.6 billion of iron ore prepayments from one of our customers as announced at the recent quarterly result. This was a non-dilutive, non-debt form of unlocking capital that boosted liquidity. Excluding this, our cash conversion was a very healthy 124%. We've continued to invest in the future, positioning MinRes to benefit over the long term. This included strategic investments predominantly in lithium, where we acquired 100% of Bald Hill as well as several stakes in WA junior lithium miners. We also invested in the development of Onslow achieving first ore ahead of schedule in May '24. In the first half, we received $588 million from the restructure of our Marvel JV with Albemarle. That divest --- that source divest our interest in the [indiscernible] lithium hydroxide plant, remove our exposure to downstream lithium and increase our ownership in Wodgina to 50%. We also, in the first half, completed an offering of USD 1.1 billion of bonds. The net result, as it shows, was a strong cash position of $900 million at the end of the period. MinRes is well placed to complete its elevated capital program from the development -- arising from the development of Onslow. As of June 30, in addition to the closing cash of $900 million, we had near $2 billion of undrawn credit lines. In addition, we have a number of levers we can pull to manage the balance sheet as we progress through this elevated capital expenditure period to bring the Onslow project online, and we've demonstrated some of those in FY '24. Turning to the balance sheet. You can see it reflects the significant investment made during the financial year. Capital employed increased to $8 billion, funded in part by additional borrowings. We saw the creation of the carry loan, which provides a receivable to MinRes, which will start to repair in FY '25. And as I have alluded to on the previous slide, there still remains significant optionality within the business to monetize assets should we need to. The next 6 months was always going to be our peak net debt, and this is in line with expectations. Our capital is prioritized for Onslow for the completion and ramp up to 35 million tonnes, and we will prioritize deleveraging as we move into the half 2, 2025, FY '25. If I can just turn your attention to how we think about capital. MinRes has a huge focus on the balance sheet over the past few years, and this is going to continue. Over our 30-plus year history, we have disciplined -- we have a disciplined capital allocation, and we have a strong track record of allocating capital to generate outsized returns. We're committed to targeting a 2x gross leverage through the cycle and a capital structure commensurate with our existing BB credit ratings. We have a strong track record of recycling capital to enhance our returns, and there has been several transactions involving Wodgina over the last few years. And now with the Onslow Road sale. We'll always look for ways to release capital from underappreciated assets. While our dividend policy is up to 50% of underlying NPAT, we've demonstrated flexibility to reduce dividends to preserve cash and balance sheet strength as we have done this year. We're focused on generating strong cash flow through the cycle. And whilst this is variable in the commodities business, our mining services earnings are predictable and growing. And as we've always stated, we will invest in growth projects if they can achieve at least 20% ROIC post tax on the long-term and consensus commodity pricing. In recent years, this has been the Onslow Iron project, which has required the largest couple investment the business has ever embarked upon, but it's expected to generate significant returns over the long term. I'd like to take a minute to remind you how we set up a durable capital structure for the group's long-term success. We chose to access the U.S. unsecured bond markets for several reasons. Firstly, it gives us debt with long tenure, with our first maturity not until 2027, 3 years after we turn on Onslow and 2 years of full ramp-up. The absence of financial maintenance covenants provides flexibility through the commodity cycles. And of course, our interest is fixed, and it's more than covered by our mining earnings -- our mining services earnings today, before the Onslow ramp up. As of June 30, our net debt was $4.4 billion, and our underlying -- our net debt to underlying EBITDA was 4.2x. We expect net debt will peak in half 1, FY '25, before beginning to deleverage in the second half as Onslow project ramps up. Our liquidity stand at a very healthy $2.8 billion at June 30 and include an upsized revolving credit facility of $800 million with new and existing banks. And lastly, I'd like to remind you that Onslow having now shipped its first ore, we're now owed over $400 million by our JV partners for funding them into the project. This loan receivable accrues interest at about 7.25%, and it's repaid from the 80% of our JV partners' free cash flow on -- from the Onslow mine. Effectively, MinRes will get about 90% of the free cash flow from that mine for the first couple of years. At current prices, the Onslow Mine Core will be free cash positive by around December. I'll cover this next slide fairly quickly. It shows FY '24 capital expenditure. It's marginally ahead of guidance, which reflected additional investment in lithium. The net debt waterfall slide is fairly self-explanatory. As stated, our net debt is expected to peak in half 1, financial year '25. We've committed to major investment programs many times over our 30-year history. And we have a clear path to get debt levels back to where we want them. After this coming half, we expect to naturally deleverage through EBITDA once Onslow has fully ramped up. We will also explore options to decrease gross debt levels as each of our unsecured bond becomes callable at par, which is well in advance of their maturity. We continue to have several significant levers available at our disposal and options to unlock capital throughout the business. Looking at FY '25 guidance, the slide sets out guidance for the year. As you can see, iron ore reflects Yilgarn moving to care and maintenance, as previously advised. Onslow and the volumes and the cost per the ramp up profile. Lithium is slightly lower as we look to optimize based upon current market conditions and preserve cash. Mining services continues to be very predictable for both volumes and margins. In terms of CapEx guidance, for the next financial year, $1.9 billion reflects a significant pullback of capital as Onslow approaches completion, but obviously, we do have to complete it. Chris will -- Chris will outline our plans for our assets shortly, but I just would point out of note that the CapEx and growth CapEx for mining services includes $235 million to support growth in projects. These are projects that deliver in excess of 20% return on invested capital to MinRes. This slide recaps what we've previously announced, realized proceeds of $1.3 billion. The transaction values [indiscernible] at about $2.7 billion, representing a 9.4x EBITDA based on the project's nameplate capacity. The introduction of a new partner and a pool of capital is consistent with our focus on long-term shareholder value creation and our agile approach to capital management and allocation. We expect this transaction to conclude and reach financial close imminently, as early as September. This slide shows how we think about our investment in Onslow. So $2.8 billion for our initial investment in 30 million tonnes, $0.5 billion for the expansion to 35 million tonnes, which takes the $3.3 billion. Just to point out, our JV partner will contribute over $200 million of that increased cost by the -- by the carry law, which we expect to reach around $800 million once we had capitalized interest within it. And once you factor in the Road sale, you have a net investment of $1.4 billion for MinRes for a project which had spot prices when fully ramped up will generate around $1.5 billion EBITDA each year. So it's effectively a 1-year payback for a 30-plus year mine life. And finally, this is just an illustrative slide only to show the value Onslow brings to MinRes once it's fully ramped up, which we expect from June 2025. You can see the quality of earnings generated by Onslow. It's important to note, Onslow will boost our mining services EBITDA to about $1 billion a year. This is sustainable, repeatable earnings, not impacted by commodity swings, which is more than able to support our current debt levels. And you can also see how quick we will delever. Again, I will reiterate, we are committed to our 2x gross leverage target through the cycle. And so, whilst there is a near-term focus on the balance sheet, as we finalize the construction of Onslow, I just want to give the market an idea of just how much Onslow will transform MinRes once ramped up. I'll now hand back over to Chris, who will provide an operational overview.

Thanks, John. Thanks. I think -- I hope you got a bit out of that, particularly around the Onslow Iron and the spend. I'll just run you through now -- basically a bit of -- a bit about the pillars in the business on what we've been doing, and where I'm taking them over the sort of short to medium term. Start with Mining Services, another pretty good year with it. Production volumes, I mean, we've also learned to measure them in the tonnes that we produce now. So up 8% year-on-year. Record EBITDA, so we're sitting at about $550 million, but on our way to doubling that over the next 12-18 months on the run rate where we're heading. And it's more than half the group's EBITDA. So I mean if you understand the MinRes model, I mean, my background is basically around mining services and trying to make sure that I have those long return recurring incomes and we spread that right across the industry. When we get a project like Onslow Iron or Mt. Marion, we own the mining services on those projects. At any given time, if we choose to, we can go and sell our shareholding in the iron ore or the lithium, but those projects that we got for mining services are life of mine. So Onslow Iron, it's probably around 50 years plus. Mt. Marion, the likes of that is probably -- if you have a look at what we've got on the ground at the moment, I'll talk about the tonnes. We're probably going to double those tonnes. But we're probably another 40 or so years down at Mt. Marion. So MinRes owns the whole of the Mt. Marion site. So everything we do down there is mining services. But -- then we have great Tier 1 customers out there. We've got crushing, processing plants, trucks, all the like on it. But that business has been incredibly strong. So as we've grown the business over the years, we've not only grown it. In terms of volume, we've averaged generally, I always say we could average about 15% year-on-year in growth in the mining services. And we've been able to maintain that. And the bigger business gets the harder it is to keep those sort of growth paces up, but we're doing it in volumes. So we're not only increasing the volume that we put through that business, we're increasing the margin. So we've moved that margin up to around about $2 a tonne. It was a bit under $1.80, 18 months ago. Look, I suspect 18 months down the track, it will be closer to $2.20. So great business. We've added, in FY '24, six new contracts, three crushing, one ore sorting whole-of-mine operation. And then we've also moved into North Queensland with some of these big chamber haul tracks that you saw up on the screen. We've had three extensions. So our retention with existing contracts is second-to-none. We have the best record in the industry for that. I can tell you how many contracts we've lost over the last 24 years, and I can tell you the pain that I went through when I've done that. So three extensions, two crushing at a crushing and haulage operation, so 100% retention over the last 12 months. And then, of course, we're moving into a new industry with the transhippers and that's part of the mining services too, and operation. Services we offer at MinRes. It's unique, can't be replicated because a lot of the stuff sitting in there is a MinRes design-built innovation. So the crushing plants that we build, we're the largest crushing contractor in the world, but probably the largest owner of road trains. I'm not overly proud of that. But these things make us an incredibly good margin. So to be able to move 330-tonne with one prime mover, it's unique in the world. And thanks to the help we have with Kenworth, but everything outside of the prime mover is designed and developed over the last 25 years by MinRes and the technology that's gone into those trailers. And we've just -- ironically, we've had approval from Kenworth. We could drop a fourth trailer on behind these things now. So we go from 80k down to 78k an hour. Carbon emissions per tonne hauled actually drops. We spread more tonnes over one engine. So we can get up to 440 tonnes; yet to do that, but we're heading down the path. We're concentrating on getting these trucks autonomous, hoping to do that by about March/April next year. Pluck the drivers out of them. If you're running 140 trucks, you need 3 drivers per truck. Day shift, night shift, and at home and then a few spear. So more than $100 million saving. That's not the big saving -- the big saving is when you got a computer running these big beasts, because the computer make sure they get the gear change right, the tire wear is perfect. I mean everything just goes to perfection. And I don't have any humans mixing with this. So my chances of having any sort of serious accidents between machinery and humans is zero. So really looking forward to getting that to happen. Transhippers, brought them online performed exceptionally well. I mean, beyond our expectations, they've just been unbelievable. But we're experts in materials handling. I mean, we should get them right. And our team, our internal team, have done a pretty amazing job on pulling them together and getting them all crewed up and running. Rehab, too, is another big part of our business in the mining services. So a lot of the big Tier 1 companies are getting us out there now and doing a lot of their rehab for them, and it's quite a growing market. The mining service. It's a cash generator in the business. It's not affected by commodity prices and the rates are always protected. We review them manually, and they get -- they get adjusted with inflation, and we also have a sliding scale, say, if we don't get as many tonnes as they committed to do, then the rate per tonne sort of goes up. So it's, as I said, amazing business, 70% of those contracts got a life of more than 30 years. Since 2006, we've averaged EBITDA growth of about 18% in that business. The chart shows the progress over the last 5 years. We've been up about 21% per annum on EBITDA. And we've actually increased our EBITDA margin per unit tonne by 24%, which is quite a phenomenal thing. No one else I know can achieve that. So we're going through at the moment, probably our strongest growth period ever in mining services this year and next year, it's really going to ramp up. I mean, we're going to get -- my expectation is I'll be at a run rate about 18 months out from now about $1.25 billion to $1.3 billion a year. So, a phenomenal business. And it's a game changer for us. The Onslow iron coming on board adds about $450 million a year in EBITDA, a bit over at 35 million tonne run rate. And it's unrelated to the price of iron ore. So that project quite phenomenal on what it's going to do for us over the next 35 to 50 years. Engineering construction, it's kind of the secret weapon inside the business. We've got the best construction team in the country, bar none. So we do all our own internal design engineering innovation, we make everything we have -- and sadly, as I was saying earlier, around the work-from-home scenario, Australia is one of the most expensive countries in the world today for anything around manufacturing. We can't manufacture anything now. We just priced ourselves out of a -- downstream processing is almost out of the question for us as well. We did a lot of work around trying to build hydroxide in Australia. As you know, I joined up with Albemarle and then -- I forgot to mention at the beginning, I exited all of the downstream and with Albemarle at the end of last year, and I'm very happy I did. We just can't afford it in Australia. What we're spending USD 1.8 billion building here in Australia, we can replicate that in 20 other countries outside of Australia for $400 million, exactly the same. So that's a real issue that we try and address. We're fabricating steel in China to a really high quality for AUD 1,800 a tonne. The stuff that we build hit right here in Australia is $12,000 to $14,000 a tonne. So just to give you an understanding of where we're at. And we're going to compete on the world stage with all these products. So our engineering business, we've got a combination now where we're getting stuff made and built offshore, and we bring it in and we glue it to the ground. We pour the concrete, do all of those things incredibly economically well. And I think if you have a look at what we've got, 35 million tonnes for the number that we've got on the ground, and the payback that project gives you, gives you a really good understanding of that. And we do some stuff externally for our clients as well. So a great business, and that adds a lot of value. We're going to give you a quick video. {indiscernible] Just 2 minutes to really let you get the feel of what we've got it on so and how it operates. So let it roll. [Presentation]

Good overview of what we're going to do and what it would achieve for Australia and for Western Australia. So we had this thing permitted in 12 months, pretty much a record time. Got the last approvals through in July of '23 for the road. And then in May of '24, first ore on [indiscernible]. I mean, phenomenal what we've been able to achieve with that. So -- and thanks to the government, both the governments were just phenomenal with it, but I mean -- we whine and b*tch a lot about how long it takes to get things approved, but Australia is one of the best countries bar none in the world. I mean the -- it's quite outstanding. And if you get organized as a miner, you can reduce those times substantially. Transparency is the key with the government to make sure that you're working with them. We moved 35 million tonnes of waste and ore so far since we've been out there. So just barely a year, the whole thing was [indiscernible] up there and where we are now. We're down to -- we're moving 1 million tonne a week up on the site. The next-gen crusher, as I said, they're all going to be online by the time we get to the end of October, as is the haul road. Right now, we're hauling with the big jumbos up the side of the main haul road on what we call the service road, which is for the light vehicles to get to and from the port. So we're hauling up there at the moment. But come the end of October, everything is sort of open and online. So 150,000 of that big haul road, especially built. I mean, the foundation going into that road phenomenal. It's not like your average highway that you drive on plus all of the service road and overpasses we're doing, so about 250,000 k's up there we're building. If you've been to WA, it's about equivalent from Perth to Margaret River with a big freeway that carries those big trucks, so far so good. I mean, on the surface, we've had a lot of experts around on exactly what goes into that fill in the mix, the quality of the bitumen, the bitumen sort of changes when we're on an uphill gradient. You've got those big try drives on the trucks trying to tear the bitumen up. So we sort of -- I think we've got all that figured out, and it seems to be working so pretty good so far. Autonomous, as I said, April/May next year sometime, hopefully, will be autonomous, hard to get it pinned down. We've been working on it for about 2 years, and we're awfully close. We've got trucks running around now that are driverless, but they've got the drivers sitting in them. Everything else, basically, like the port, pretty much fully operational now. As you can see out there, the big storage shed, truck maintenance bay, we can run 13 of those big road trains simultaneously through the -- the workshop at any given time and make sure they get their grease and a refuel and about every second trip, they call through there. Resort style accommodation going unbelievably well. We're the place. We've got the best accommodation in the mining industry by far. So we've got flights landing direct on those sites off the East Coast and shortly out of Perth. So, I mean, we are the go-to company. That's all about retention. If you get any of these mining operations, process plants, the lithium plants, in particular, you want to have your people there long, long term. You have the same people turning up doing the same thing every day. The difference in production is millions and millions a year. So that's why we're so fixated on retention. So iron ore overall for the year, it's been a pretty good performer for us. And iron ore is not the sexiest product in the world that doesn't have that ring like lithium or diamonds or copper, but it's the best of any commodity that's mined. The biggest mining companies are only the biggest mining companies because they've got iron ore in their portfolio. You take the iron ore out of the big miners and there is nothing there and have a look at their bottom line year in, year out, what the biggest contributor is to that. And which is the most boring. I mean, every year, those big Tier 1 guys are going to turn out billions and billions on those iron ore commodities they produce. I mean we've been fortunate enough to find the last region in Australia. So the best mining region in the world. sitting down, you've got sort of up the top of the Pilbara, you've got the Fortescue's Roy Hill, BHP in the center. You've got Hamersley Iron Ore or Rio Tinto and down a bit further the Road River that they operate and then right below that, you've got us, and we're going to be there for a long, long time. And as John said, I mean, on a bad year, it's going to make $1.5 billion for us in commodity and mining services. If it bounces up to USD $130-ish tonne. It's probably going to make $3 billion for us. So somewhere around the traps over the next few years, we will see iron ore at $130. I mean, remember not that long ago, I mean, sh*t, this is about my fourth iron ore downturn I've done in the last 20 years. But we remember it at $38 a tonne, and then the next port of call was $180-something a tonne and then down to whatever. You only need 12 or 18 months in the sun with iron ore and it just completely -- I mean, you go what [indiscernible]? So great project. Onslow, as I've said, we've loaded 4 mini capes in a couple of capes, we're into full time into the capes. That's what they're built for. So the Cape carriers and sort of 100,000 to 250,000 tonners much lower cost per tonne shipping up into China. 18 million tonne run rates where we're going to be come December. Come June next year, we're going to be sitting at around about 35 million tonnes run rate. Pilbara. The Pilbara hubs performed pretty well. We've been at the top end of guidance up there for the year on that. We lost the birth out there for 10 days. We've had 10 record loadings out there this year towards the back end of this year on tonnes per hour going on, on the ships. We've really done a pretty amazing job. We bought BCI and out of Iron Valley 2, you might have noticed, so why did we do that? Because we want to have control over the rehab. And if it hangs around for the next -- there's more than 100 million tonnes still in the ground up there, but we need to be able to be putting that on rail somewhere down the track. And somewhere in the next few years, we hope to get cracking on that birth 3 up there in joint venture that we've got with Hancock. So Yilgarn Hub, we announced that we're going to shut that down. We're winding our way out of that now. So all the capital spend down there has stopped. We've moved probably about 150 people out of there so far, but come Christmas. We'll be turning the lights out down there. We've mined since the beginning of time down there, we first went down there for [indiscernible], we've mined -- about a bit over 73 million tonnes we've been able to get out of there. High-cost areas. So this time next year, when Yilgarn is not in the mix, you'll have a look at what our average cost is of iron ore going out. It's going to be much lower and more sustainable. So our iron ore, our transition to the long life, low cost. As I said, it's a 50-year project. It will earn us money every year, great partners in there with [indiscernible] AMCI, incredibly good partners. And it's a complete mines operations. So no lump coming out of there. The good thing with that, 75% of that ore for the next 50 years of the MinRes ore goes to Baowu. They're committed to taking that. They've spent quite a few hundred million dollars on buying a couple of big blending yards up in China. So as Simandou comes online, all of the Onslow Iron ore is going to be blended with Simandou and it's a perfect fit. I mean, how lucky can you get. A lot of organizations out there rightfully see Simandou as a threat. For us, it's quite the opposite. The other thing that's quite ironic is, and we're not really clear on this. But under the strategy in China, they've been working over the last couple of years to develop a business out there that buys most of the iron ore. Ironically, they call it China Mineral Resources. The Deputy Chairman of it used to be on the [indiscernible] Board, and he loves Mineral Resources. So he's taken our name. Because we are blending and we're working at our ores going to Baowu, we are not part of that. So we will continue. We will forever trade on the spot market. So a lot of good value in the partnerships we've got with them. If you have a look at our FOB cost, USD 29 a tonne FOB, $45 up in China, if you add shipping and royalties. That $29 a tonne, I just -- I know I keep saying it, that's including the mining services. So we're on board for a pretty low cost. So this thing is pretty good in any market. I mean, it's quite phenomenal. I mean if we're selling at around $100 a tonne, we're going to get probably -- take out the moisture, take out the impurities out of it, we're probably going to get around 80-ish max USD a tonne for it. So, you can do the math on that. It's pretty good. 50 million tonne operation, let me be really clear on this. I'm going to keep doing what I've done for 32 years and then rest. We operate this business to market conditions. If we're trading at $200 a tonne for iron ore, we're out there, we'll be going to 80 million tonnes. But we're not going any further than 35 right now, we're going to pause. We're going to let the cash roll over the top of us. We're doing nothing. I'm saying 0 in terms of capital in the next 12 months beyond 35, and it might be 18 months, it might be 2 years, but 0 in the next 12 months. If I'm going to do something, I will come and tell you I'm thinking about it. I'm not doing it. I'm thinking about it, okay. So let's get off the ledge on that one. Why am I doing that? Because the price of lithium is tanked, no one is making money. We're fairly comfortable where we're at with iron ore. I mean, we see a lot of resistance around the USD 100 a tonne. I'm comfortable that we're probably -- I'm not going to call it. We're sitting on the bottom. I have no more idea than you guys have on where the price is going. But we are seeing an awful lot of resistance where it is. So it's pretty good. So we're clear on the 35 going up to 50. The one thing that we can do -- by the way, we've got transhippers 6 and 7 coming in '26 with the help about [indiscernible] got that. They were aiming at '29 was the earliest I could get those things out of the shipyards with Baowu's help, Chairman to Chairman in Beijing, it's amazing what can be done when they're both owned by the same owner, the government. Mr. Ship owns Costco and [indiscernible] so we're getting them in '26 because once these things get up to nearly 5 years old, you've got to freight them up to Singapore and you got to run them over the slip every 5 years. So I need that. Plus, I'm told, there's a couple of other transshipping opportunities out there. And like I do with the crushers. I always have a crusher at my sleeve somewhere, so I can move very quickly, and I can get it nailed. So -- and these things here. And I'm not going to publicly say this, but we're going to really sweat that 35 million tonne and see how hard we can push it with the capital that we've got, and we think we can move it in the right direction. So, lithium, a little bit about record production out of Wodgina, Mt. Marion, underlying EBITDA of $384 million. We averaged $1,279 a tonne. If you had to tell me in 2018, I's going to be selling it for that. I would have packed up and going on holiday. I mean, that would have been an amazing number. When I started these mines, we were lucky to get $400 a tonne for lithium. So let's not forget that. But -- we've got used to higher prices, and we put a lot more gear in there and got greedier and tried to get more product. We're paying attention to that. So at Marion, we shipped 118,000 tonnes of C6 equivalent. FOB cost of $498 million. We're reducing costs down there. We're improving the feed quality and the plant performance. We're still going to progress the underground. We're about 70 meters down on a vertical basis. So we're putting in a drive down there. So we get down to about 350 meters. Why are we doing that? Because we put three or four drill rods in the ground. We know that we've got 10 million tonnes down there. We probably suspect we got about 40 million or 50 million. what happens these feeder systems -- if you're lucky enough to find them, we've found two at Mt Marion. It's a bit like a cyclone, they come up from kilometers down. So we chased this thing down with about three or four drill rods about 1.2 k's and the geos have said there's 10 million tonnes in that space. We suspect there could be -- there will be an awful lot more than that. So we're going to get down there. What it does overall for us as it reduces the overall strip ratio down at Mt Marion. It actually shaved several billion dollars over the life of the mine, $3 billion or $4 billion, just being down at that pace, so only bringing out quality ore. You get that with the open cut. You got a great blend, 20%/25% will be underground feed. It doesn't really change the mix of total cost FOB. So you get in there and get that done early. I suspect, look 5 years down the track, we might be thinking of doing something similar up at Wodgina. What we're doing right now, to be clear, I'm pulling to back the production down at Marion. I'm doing exactly the same at Wodgina. I'm really throttling them back up there. I'm starving the product going in the market. I don't want to oversupply the market. I don't want to waste my ore. And it is the best result in terms of cash out of my bank account over the next 12 months is to do the pullback I'm doing at Mt Marion. We're also -- so down there, I'm going to move a dig fleet of site, the dig fleet's a 600-tonne digger. And about nine big dump trucks, 280 tonners I think they are. I think the people are going off-site. Yellow goods are going off site. I'm really pulling back on the cash spend down there, but I'm starving product going into the market for obvious reasons. Wodgina has run pretty well out there. We slowed down on the strip up there. We really -- we put a big fleet out of there and a bunch of gear. So the cash going out of the door -- again, cash is precious, so we've reduced doing that. And we shipped out of there about -- what have we put, about 200,000 tonnes went out. We're also, as you know, committed to a process with hydroxide with [indiscernible] that finished. That expired in June this year, but we were sort of stuck with that and committed to it. We got all that stuff processed up in China. And believe me, I mean, once I got a really clear view of what it's like operating in China, I mean, I want it out of there as quick as I can get out. The costs are pretty ridiculous. So we're done with that now. I can probably tell you in my time, MinRes will never be a downstream process of lithium. I mean, we're good at digging it. We got it converting at the spot put it on a ship and that's, in my view, that's about 85% of the value. The ROIC on anything to do with downstream, no matter where you do it is a waste the time and it's left to those that want a marginal return less than us. So wherever we can, the message is this, what am I going to be doing in 3 months from now? Spending as little as I can on these mines, conserving cash pulling them back hard. I'm not going to shut them down because there's a lot of development work we've got going on, on all of these sites. And that development work is important. We're improving recoveries. We're putting in some equipment down there so that we can pull the iron out of the feed going into Mt. Marion. That means that we've got more quality feed going in the plant. You get all that stuff out, it takes up less real estate. And we get a better quality product and a better volume of product coming out of the plants. Bald Hill, as I said before, we've owned Bald Hill probably for about 10 months now. So main focus on there on day one was clearing the decks, getting the high gear out, getting all the routes and the schemes out that had been put in there, and it was pretty ugly. They're operating at high cost. We carved everything out. We've commissioned a new crushing plant down there. It's 100% MinRes owned gear down there. We picked up some very, very good people down at Bald Hill and a great little culture down there, and we've really worked hard to preserve that, put in a really good team down there, and that little place is running well. We are looking at trying to grow that, and I'll talk about that in a sec. But look, our costs down there for 20 -- FY '25, we think we're going to be running at around about $560 a tonne coming out of that. But lots of good things. Ironically, Bald Hill has got the best recoveries of any hard rock lithium plant, literally, in the world. And the reason for that is that it's the type of material down there. It's very coarse-grained and it loves getting separated. So we sit around about 75%/76%. And that's just one pass-through the plant. So typically, if you all understand the PLS that they run dense media to grab the coarse grain out and then they run flotation. Wodgina, we're 100% flotation. Mt Marion, 100% dense media, and we're going to be adding some flotation down there probably in about a year, 18 months' time. Bald Hill is just dense media, pretty amazing little plant. It only does about 150,000 tonne a year product at the moment. So as I said before, we're in a tough market. We're in one of those downturns. It's nothing we need to panic about. You just need to closure eyes and go, we're in a downturn. No one is making money. I mean, we get that. I mean we just got to wait because eventually, a couple of things need to happen. Our lazy, third-world -- first-world car manufacturers in Europe and China. All of the leaders in those companies are making great profits out of combustion engines. They don't want to invest the money and waste their profits on developing the electric vehicle. You have a look at China. China has been working on it for a long, long time. I get a company like BYD. They can go and build a really neat car that you put your kids, your wife and kids in to go to school. I mean, very safe grade cars, low cost. Our Western World friends haven't done that. And just to encourage them and tell them they're doing good, we're going to put some tariff protection on you. I see Canada recently this morning have just come out and said they're going to protect cars going into Canada because they can't make electric cars and they're going to give all of their car manufacturers a free ticket to keep making combustion into -- It's coming. The world is not going to stop demanding we carve it out of the atmosphere. The cheapest and quickest way of getting it out is we've got technology that gets it and to run electric cars. And the amount of carbon you take out of the atmosphere worldwide is phenomenal. So I think we're probably a couple of years behind where we wanted to be. I think that probably by the time we get up around late '26, early '27, we're going to see a big change in the supply-demand curve. So in the meantime, we'll keep doing what we're doing, reducing costs across both our sites, making changes, getting the quality up, getting improvements on recovery. We're looking at little desktop at the moment. We think we're under about $10 million, we can wind Bald Hill up from about 150,000 to 200,000 tonnes a year. That does two things. Obviously, we get more revenue. But the other thing it does, it pushes our unit costs down. So we think that we can do that quite cheaply. We think we can probably build a plant -- we can build a plant in China, haul it over here, and glue it in the ground. It's probably 18 months away before we do that. But we think for about $30 million, we can build about a 300,000 tonne plant. So -- we're pretty much there, but not right now. I've been consolidating, as you know, I'm a strong believer in lithium, where it's one of the things we can dominate in. We're the largest lithium, hard rock lithium, producer in the world. I want to get bigger on it as the demand comes back on board. In the meantime, what I've done over the last year or so is I've picked up about 2,000 square kilometers of land and what I consider to be to the most prospective land in the world down in the gold fields. That does not include the shareholder -- strategic shareholdings I've got in the juniors, so it excludes that. A good example of what we got, if you have a look up at around Mt Marion, I picked up the Goldfields land up there, did that probably over 6 months ago. We don't advertise that we're doing this, and we don't advertise because we don't want to try and give our competition the heads up on what we're doing. But -- we've got some really great land down there. We've put some drill rods -- only few drill rides down into -- right next to Mt Marion in the [indiscernible] ground. And we think we've got a solid 50-ish million tonnes we've picked up in there. We've got about that same volume up at Bald Hill. Our geos out there, think its another Mt. Marion, but again, we're running operations up there at the moment and trying to get the drill rigs in. We are getting them in, but it's taking us a little bit longer than we expected. So we need to get those drill rigs on the ground before we can come out with a reserve and a resource and then we'll come out with a mine plan and where we're heading, but that's probably [indiscernible] little bit more news at the AGM, but realistically, it's going to be during next year. So yes, working really hard on that consolidation down in the Goldfields. As I said earlier, if the price of lithium is $1,500/$2,000 a tonne, I mean this would be a different atmosphere this morning, but it's not. Energy. Again, a lot of great success out there. We have got 7,300 square kilometers in the Perth Basin. So we're the biggest landholders out there. And as one of the past shareholders from the company, I accumulated that [indiscernible] keeps reminding me in nasty e-mails. I didn't pay much for it. But we've had great success. We've found we've had four significant gas discoveries up there and one very significant oil discovery, and we've had one [indiscernible]. So we drilled and we got no gas to speak of, I say 5 out of 6 is a pretty good hit rate when you're looking for gas. Two of those are production wells, but this is basically these two tenements, what we call [indiscernible] and [indiscernible]. So lots and lots of gas up there. I think we've probably got the most gas in the Perth Basin so far. We recently bought our own drill rig that will go down 5,000. So that gives us a lot more control over cost and timing and what we're doing. We call it the MinRes Explorer. It just -- it's probably about 2,000 down at the moment on its first hole for us. So another hole we're drilling. We expect highly likely. Our guys have done good seismic up there. We're probably going to find some more gas. So, we're waiting on the government to come out and give us their position on whether they'll let us export LNG. My guess is it's highly likely they will be because we've made the right commitments, we're going to sell on the spot market. If there's a shortage of gas in WA, we'll turn our gas back in down and we'll fill that gap for them, provided the others are putting their share in. And it's about a 5-year deal. Beyond that, we want to be doing downstreaming in WA. So we want to be looking at urea, methanol, power generation, all those sort of things, so that we can do downstreaming and get the right return on what we're doing. [indiscernible] Basin, we got 7,500 square ks up there running down that case. That's inland adjacent, the Chevron gas field. So doing a lot of seismic work up there now and then the drill rigs will be hitting up there next year. So that's sort of about where we're at in the business. Where we're going, what we're doing, what's happened over the last year. As I said, it was our biggest and best year ever. I know it doesn't feel it right here this morning where we're standing here, but it was a great year for MinRes. I mean, if the lights go out, we don't do any more development for the next 30/40 years, I mean, the business is going to make a lot of money, no matter what. We've sunk the capital, got a bit more. I mean, we'll be running through till late October on what we're doing up at Onslow Iron. After that, I mean, we're pretty much shutting everything down and will just be parked up, catching fish and watching the cash come in. So the headline on Onslow Iron, we got it built on time. Actually, we got to build ahead of time. We got it built on budget as we said, when I started to say, just so you understand, for me to get approval up there to get iron ore going out of Onslow, which they called a petrochemical hub. I couldn't get the liberal government to support me on that at all. When labor come into power, they had a look at it economically, they saw that the state needed cash income. They've been very practical anything that is good for the state, I mean, they get behind, and this is going to deliver a lot of, obviously, benefits to WA in a whole lot of different ways. So they saw their way clear that they said they don't see any harm in 5 million tonnes going out. So I nodded my head at 5 million tonnes. Then I had a commitment with them that I would be dust free. I'm not going to do what Port Hedland has done to Hedland, and I'm not going to do what it does in [indiscernible], so we will make it dust free. And then I sort of quietly got up to 15-ish million tonnes and then 20 million tonnes, then to 30 million, and that was "I promise that I wouldn't go any further than 30 million". And then Mark McGowan went out of office and Roger Cook come in and so during that period, I went clonk with another 5 million tonnes. So we were sort of sitting at around about 2.7 billion to get that 30 million tonnes delivered and that little sneaky 5 million tonnes that went in. The joint venture issued MinRes construction with about a $560 million variation to add that extra tonnage. So you do the math on 5 million tonnes after you got -- and it works incredibly well. So I hope that gives you a good understanding of cost and time. We were always committed. First ore was due on ship in October this year. They also give me a little variation to try and speed that up. I got a variation for about $100 million to speed the project up and pull it back to June. And we've really stretched that, and we got that first shipment out in May, which is pretty phenomenal. Say, look, all in all, going forward, I mean, we're going to do what we always do. I can't tell you exactly what we're going to give you a good flavor for what it looks like. that I'm going to say that we're going to be unbelievably conservative, and we're going to rope in every dollar. We scrutinize every dollar we're spending. Why are we doing that? Because if we come out the other side of this with a bucket load of cash, I mean, that's where the opportunity sits in these times. I mean I've had my best opportunities. I'm not going to go and spend money, but we will develop some opportunities going through where we're heading. So very, very conservative year. It's going to be a little bit tough with the lithium. We all know that. I don't know where the price is going. I mean I would have thought a couple of months ago, we were dragging on the bottom, but we've sort of edged it. We've gone down a little bit further than that. Any new mines coming on stream at the moment. I'd hate to be there, be the cash trade will be phenomenal, whereas we're in the opposite direction, us and PLS and the likes of Albemarle and Greenbushes are in a pretty good place. I mean, we'll weather the storm. it isn't going to be pretty, but we will get there. So balance sheet is focus. If I fast forward 12 months and 18 months out from now balance sheet, the cash that will roll in. I mean, the loans that we've got with our JV partners that they have to prioritize them out of the value coming out of that iron ore until they pay those down to us. So we've got some pretty good income coming at us. Got a great experienced management team. I've got people that have got good strong contracting background, commodity background. I mean, we know what we're doing. We're hands-on operators. We get in the weeds. We understand the detail. I mean that's really, really critical. I know every part of my business front and back. And as I said, I've been through a number of cycles. I've run a company and administration, got it out of receivership back in the '80s. I've had a lot of practice, not that I need that practice now. But I know how to make sure, sadly, how you got to pull back on businesses, it costs people jobs. It's not a pretty time to be around. But look, we've got good balance sheet management. And as I said, we've got lots of great opportunities ahead, but we're going to manage to the time. So if you got any questions, more than happy to answer them.

Thank you, Chris. For those I've not met, my name is [ James Maraki ], I'm the Treasurer here at MinRes. In a moment, we'll open up both the floor and the online portal for questions. So for those attending virtually, if you've not submitted your question yet, or join the live audio, kindly do so now. For those in the room with questions, please raise your hand, and Kate and myself will head over to you with the microphone. Please ensure to start your question with your name and company affiliation. We'd ask if you could please limit to a single question to allow time for other participants and we'll circle back if the time permits. We intend to go back and forth between live questions in the room and online questions throughout the session. With that, I'll open the floor to questions initially.

Can I ask two? Firstly, on the lithium business. Obviously, it's a year where, as you said you're throwing out the deck chairs, but your all-in cost for the business, including capital is probably around AUD 1,800 a tonne. Where do you think costs across the lithium business can get to? Obviously, it's a function of how much you produce and you're trying to be restrained in that respect. But what do you see as the ultimate goal for the all-in sustaining cost of the lithium business?

Good question because, I mean, the capital -- we're spending capital down there, and we need to get that done so that we can come on stronger when the price comes back. Look, my expectation is that we might be down at these sort of levels for 6 months or so. I mean, I would expect sort of getting early into the next year that the first the prices are going to go up somewhat. If they don't, then there's going to be a lot of operations that will just turn off. I don't want to guess where I can get with all of that because we're still trying to figure out what we're going to spend that capital on. We've got a good idea. And it also largely depends on where the dirt is coming from out of the ore body. Some parts of the ore body will literally yield twice as many tonnes per day in process through the plant. So other than the guidance we give you, I don't want to sort of go too much further.

Okay, thanks for that. And then secondly, you gave the detail on the waterfall of the CapEx that's been spent at Onslow, et cetera. And obviously, your guidance for FY 2025. Beyond FY '25, is there any CapEx remaining to complete Onslow to 35 million tonnes per annum? Any growth CapEx, obviously, they'll be sustaining, but. . .

No. Look, if I said there's a lot of bits and pieces all around on tidy up work and sort of comms and stuff up the road. If I said that after Christmas, we're going to spend $100-ish million spread over the next sort of 6 months would be probably tops, I'm thinking, John?

Yes.

$100 million just runs off the tongue. It's not much is it?

Kate McCutcheon at Citi. At the June quarter results, certainly got the sense that Onslow 50 million tonnes was something that was happening, you were going to 40 million tonnes and 50 million tonnes. Today, it seems like that shifted to the right, which is fine, but just wondering what sort of changed? And then secondly, what does that mean for going to 50 million tonnes in terms of CapEx when you decide to do it because I assume you've got a construction workforce that's rolling off and then you'll have to come in, if you can sort of talk through that?

Yes. And that construction workforce, I mean, for 30 years, we've managed it. We do external work with it. Some of them will disappear. But it's managing the business at the time. I mean, why are we not going with it because price on iron ore has dropped down to $100 a tonne, and the lithium business is basically dragging along the bottom. And until we get some improvements in both the balance sheet and the outlook, we just don't spend the money. But when we said we were going to go to 50 million tonnes, iron ore was $130 a tonne, we were sort of sitting around $1,500/$1,600 a tonne on lithium. And I kind of had an expectation. I thought that lithium would struggle to get under $1,000 a tonne. That's gone under sort of once it breaks that barrier. So when that sort of thing happens, I mean the spend just completely changes.

Okay. That makes sense. And then the lithium volumes, you've obviously got two joint venture partners you're working with. You talked about the CapEx that you're spending. So it looks like it could be a tough year with pricing here. Just -- is this a collaborative guidance plan with your joint venture partners or any comments around how they're feeling around putting CapEx and money in, I guess?

Yes. Look, I was up in London a month ago. I spent 3 days with Albemarle and we sat down and we had to look at where we're heading over the next sort of 1 year and then the next 5 years. And look, they've been -- they've been a fantastic partner. We went through some changes, as you know, with Albemarle around my view on downstream processing and having plants ownership in China with lithium. But a great partner. I mean, we're pretty much as one on where we're going. I mean they leave us to manage it around the plant. But I mean, clearly, capital is king going forward, and it's not happening. I mean we're still -- Look, on the 50 million tonne on Train 4, 5 and 6 at Wodgina, we're still going down the path we're doing the engineering. We're having a look at all of those white collar things sort of from sitting in the office, we're doing all the agreements with the traditional landowners. We're getting all the approvals done, particularly around onset go up to 50 million tonnes. I mean that might take us another year or so. But getting all that done doesn't cost a heap of beans. But having it set and ready to go. And I got a question a while ago, well, why was the capital intensity on going from 35 to 50 so high. I mean the reason for that is that -- we probably haven't openly disclosed this, but there's a channel that comes in for about 20 miles that -- thanks to [indiscernible]. They dredge that it's 14 meters deep, and then it comes to a stop, just past their LNG product loadout. And then it goes to 8 meters into a little service wharf, and that's sort of that area we got our transshipping. So on one side of that 4-meter basin, Chevron, on the other side, you can go and drop berth in there. You can bring Cape carriers into that, and you can 2/3 load them and sail them out. They really need 18 meters of trench. We don't want to dig it. So we can sail them out 2/3 loaded. And economically, we get quite a big saving on doing that. So we've sort of fudged all that into that $15 million add-on because the operating costs again kind of plummet. But yes. Look, I hope that gives you -- there's always a lot more than meets the eye that's going on. When I explained that about the birth and the savings -- what we aim for is if you overspend on the capital because you get those operating costs down, that's the thing that's going to be around Capital is the one-off thing. It's nothing. By the time I get to this time next year, you'll go -- you'd be like my bondholders in the US, they go, what's the problem? What are these guys not getting? And I'll go, you need to go talk to them. I mean when I go to the U.S. and go to the bondholders, we just sit around and talk about fishing and we love the business. It's amazing. Can we lend you some more money? And right now, I've got a nervous bunch of nellies in Australia.

We'll switch to online for the next one.

[Operator Instructions] Our first online question today comes from Rahul Anand from Morgan Stanley.

Hi. Good morning, everyone. Thanks for the call. Look, I have two questions. One was related to the mining services risk where you talked about in the next 18 months, you expect to get to $2.20 a tonne, which is about a 10% lift in your margins. I would think that, that continues down that trajectory where your mining services margins continue improving into the medium term beyond that. If you could provide a bit of color on that, that would be great. And then the second one is just your plan on the gas assets. You've had a few good hauls there. What's the strategy? Is it similar to part sale? Or do you want to prove it up a bit more before you get to that stage and try to get a bit of cash in?

Yes. Okay. Thanks for that. Look, firstly, on the margins. I mean, I stand myself year after year that we not only keep growing that business at 15%, some years, 20%/25%. But we also grow the margins. I mean it's getting tougher and tougher to do that. I mean, I do have that expectation we're washing out some of the low-end stuff down around the Yilgarn. We're bringing on some better longer-term high-quality. And the reason we get those margins too, by the way, is that when you tip innovation and say our crushing plants, 15 million tonne, we can put them on ground for a pretty low capital cost, so Onslow Iron. I'm going to think that we probably put that in for about $230 million. We got 45 million tonne up there. I mean, if you were doing that on any of the major sites, the Tier 1 sites, they wouldn't get it done for $1.5 billion. So that attracts margin. That helps us to be able to do that. These big road trains were developed. There's nothing like it. I mean they moved it at a low number, and they're incredibly popular. I mean, I'm fighting my guys to make sure I've got enough traction Onslow Iron because they're putting them everywhere. Yes, I do think I'm going to get to $2.20, 18 months, 2 years down the track from now and sustainably. I'm not sure how much more I can keep lifting those margins, someone's going to shoot me one day. And the gas, what's the plan on the gas? The gas was to be self-sufficient on day 1. That's why we got those tenements self-sufficient and just have another cost that we can control. So, it's like opening an airline, the more costs we control and the more we can control when we turn our operations on the more money we make. We found a huge amount of gas, more than we expected. I mean, we've got a pretty good crew working on it. What is the plan? Plan is to see if I can go and export. I've got a number of organizations out there that want to provide the capital, so they want to provide it. And similar to what we've done on the road. They tipping the capital at 8%/9%, and we're looking for 20%/25% return. So that opportunity is sitting there, but we're opportunists as well. If -- part of our model is to lock down long-term mining services agreements and not necessarily own the product beyond that. So who knows what will happen.

Our next online question comes from kaan Peker from RBC.

I just wanted to talk or ask you around the changes at Mt. Marion, increasing the quality of the final product. What operationally has been done there and is there any possibility of reducing capital at Mt Marion? I think obviously, you talked about underground and flotation, how committed to the capital are you at Mt Marion?

Yes. Look, eventually -- I want to keep spending this money down there in these improvements. So we're going to put in whims down there, and we're putting in ore sorters, ore sorters pulls the iron out. So much higher-quality feed going to the plant. Eventually, we'll have all fresh feed coming at that plant as well. We're probably a year away from that. But once I get to that level, I mean, I want to one day get back to where we were in terms of the cost. So once I get my strip ratio down, I get all of those incremental changes and improvements done. I mean, I'm going to guess, I want to be sitting down around about below USD 500 a tonne FOB with that operation. And look, right now, we have to pull back on the tonnes going into the market. I mean that makes common sense to do that. I get rid of cash burn out of there. So a whole dig fleet, 600 tonne digger about 9 big trucks and a whole bunch of doses and stuff and the people associated with that are all going to go. That popes my unit costs up a little bit, but I'm also -- what we've been doing is scavenging that product down there, say, a lot of stuff that was normally going to tails. We've been grabbing it at 3%/3.25%, but now pushing that over 4%. When you do that, when you turn the dial up, your yield drops. So you're getting less tonnes out, but a higher quality, if that makes sense. But that does push the costs up in the short term. But -- so I need to have that combination running for the next 12 months.

Our next online question comes from Rob Stein from Macquarie.

Just a question about Mt Marion. So obviously, you can see that volumes have pulled back some of that -- pullback and down leads the market response with offtakes and the impacts of the market in China. But similarly, can you sort of comment on what you're expecting to do at Mt. Marion around the underground? I'm noticing the increased capital in lithium given the market environment. Is that related to the underground development that you're continuing there? And can we expect volumes to respond once that's fully developed?

Yes, of course. I mean we're spending capital on that. But as I said earlier, I mean, we literally -- in terms of the savings we get on strip down there, we save billions. And I can't give you the number, but it's more than $3 billion that we save on that strip down there. So yes, we're about a year away from getting down to about 350-meter vertical level. Once we're down there, well, obviously, we'll pull some dirt out for the plant. We'll pause a little bit because once we get there, we've got to put the drill rigs in again and pump some more holes and once you're down at that level. And then we'll develop a mine plan. But yes, the overall result is that hopefully, within about 12/15 months, and now we're going to get down to a sort of a longer life bottom cost per tonne.

Thanks. I'll hand back to the room questions now.

Chris, Mitch Ryan from Jefferies. Two questions. My first one is on Slide 16, you've shown your debt profile as at the end of June. Can you talk to us as we sit here today, how much of the revolver in the 750 bridging facility have been drawn?

So none of the original facility is being drawn. We've drawn down on 3 revolving credit facilities, about $270 million.

And secondly, can you give us an update on Onslow how that's going operationally? Obviously, you said you were mining at roughly 100 million tonnes per week. How much are you shipping? What's your ship loading rate at this point in time?

So we're -- it's a 1 million tonne a week that we're moving 1 million tonnes, so a bit over 50 million a year.

No

So that's a combination of strip and ore waste coming out to get the 35 million tonne. So we're currently ramping up progressively. We'll be at 18 million tonne run rate by December, end of December, 18 million tonnes. So if you divide 18 million tonnes by 12, that will give you the monthly run rate for December. Going on a ship. Yes. And then we'll aggressively push that out to 35 -- by June/July next year, we'll be sitting at 35.

Sorry to clarify, you said that's 18 million tonnes by December. How are we going today?

September, August. So for the month of August, I'm going to guess we're probably doing 450 tonnes and that's a pure guess. I haven't -- I mean, I've been so wound up and a whole bunch of stuff. I've lost touch of it in the last couple of weeks. But I think we're doing maybe two cape carriers and maybe pushing for three. So that's somewhere between 220 and 640.

Sorry, 420 to 620.

Chris, it's Glyn Lawcock of Barrenjoey. Can you just help me understand a little bit, I mean, it's tough times you're batting down the hatches and it's -- but it's still cyclical, not structural, right? So I think you probably agree you've been through many cycles. So why didn't you push ahead? I mean there are ways to bridge the debt problem you've got and push ahead and act procyclically versus restricting? Because, I mean, you've got some of the lowest cost assets in the lithium market, particularly Wodgina. You're pulling it back. And I remember you said last time your upset Albemarle made you turn it off. Then the market turned. I feel like you've done it again?

So -- and yes, you're right in what you're saying, but I was really upset with Albemarle turning it off. And we should have kept those two trains running. But it's a view of mine. I don't want that to end up in the paper that -- I mean we've got a great partnership with them. The reason for that is that from -- our experience is mining, theirs is in chemical process. We needed to be moving the top off that mountain back in 2018. We'd have been in a different position if we had -- when we caught that cycle, we'd have been in a way different position. So right now, I don't want to turn off. I want to keep all the development work running, and I want to keep that idling over. And I'll do that. I don't want to change. So I'm pretty much locked into that for the next 12 months. We sort of agreed that we're not going to do anything different, but conserve capital. But we will keep the two trains running. I mean, you could go a lot more conservative and we could shut down an operation if we chose. I don't want to do that. And -- the other part of that, too, is that, I mean, we've got a social responsibility too. We can't just keep turning people on and off as well. I mean, we've got some good people at years of training to get them where we are, loosing that experience to be painful.

I get it. So you think this is the optimum to manage cash flow today is what you're aiming for.

Yes. Yes. This is my view. We're doing everything we can to both balance and keep it operating and get development done. So as we come out the other side. We're in a much better condition. I'd maintain the workforce. I don't want to lose that skill set that I've got. And I think I'll get this back in spades when the price gets back to something normal. Understanding, too, a lot of this is judgment call.

We'll head back to the online portal now.

Our next question comes from Lachlan Shaw from UBS.

Thank you for your time. Just a couple from me. Maybe if I can start on Lithium and Marion. So focus here to improve [indiscernible], et cetera. So what's the potential to lose margin. So what [indiscernible] the move that you're putting in place here, would that get the asset to positive cash flow, breakeven, how do we think about that going forward? I'll come for my second question.

Look, the answer to that is yes. I wouldn't be doing it if I didn't think that we're going to come out the other side like that. So I don't know what more I can say on Mt. Marion.

That's helpful. And then just -- secondly, just a couple of clarifications on capital guidance -- CapEx guidance for FY '25. So sustaining about $0.5 billion. How do we think about that moving forward as the business gets bigger as Onslow ramps up. And then just a point of clarification, the Mining Services growth CapEx of 235, just wondering the projects that you've cited, does any of that relate to Onslow?

I think obviously, we haven't provided guidance beyond FY '25. So I think it's difficult to call what sustaining will look like in that time. I think what I would say is you can always optimize sustaining depending on price environments to be able to accommodate cash. Sorry, what was your second question -- second part of your question?

Sorry. Just a clarification on the Mining Services growth capital of -- what was it 235 or there abouts. I'm just wondering if any of that relates to work at Onslow or it's sort of separate projects?

There's a strong demand for external projects for mining services, as Chris alluded to. What they do is -- is -- is pretty exceptional in the market. and they're increasing their demand and their service. And so that's typically external looking contracts.

Our next question comes from Paul Young from Goldman Sachs.

Chris, it's been a pretty well 12 months, but you've been here before, particularly back in 2015, and you've made some pretty tough decisions by pausing growth on Wodgina and also Ashburton, and reducing the workforce. These are not easy decisions. So looking at your balance sheet and just iterations, it does seem like this -- you've come out with Plan B today, which is cutting Cap costs and also CapEx. I know you've previously said that you've got a lot of levers you could pull. And to your point around the lithium price, you weren't expecting prices to fall below 1,000. So I'm just wondering if things do stay at current levels and iron ore does derate further, do you have a plan C? So do you have any options around asset sales or further cost out?

So asset sales -- no, the answer is I don't. I have assets that people would like to buy. I don't have any plans on selling them. And what I'll do is if the price of lithium continues to drop, I mean, there won't be a mine on the planet that's making money. So we will really just start pulling more and harder and harder on the spend until we strangle it. The iron ore -- look, I don't know where the iron ore is going either, but I suspect it's sort of bouncing around where it's going to be. I'm not overly concerned about iron ore at $100 a tonne. I mean, I'm happy with that. If it stays there for the next 50 years, I'm really happy. But yes, lithium, I don't think lithium's unsustainable where it is. I just -- I don't see any companies out there that are going to turn a dollar. So at a point in time, if it got worse, and it was going to go for longer, we'd take much more drastic action. We'd probably think about what the next steps were. I don't want to go and say them there. But I mean, we'll take whatever steps we have to do to save the beast.

Thanks. That's the last question we have time for. I'll hand it back to you, Chris.

Okay. Well, look, thanks, everyone, for your attendance. not the best set of annual results we've ever turned out. But, I mean, we're victims of the circumstances like everyone, but be assured that we will continue to do what we've done for a long time. We'll manage -- we'll manage the cash, we'll manage the business and will come out as we always do. I mean, we'll come out much stronger. I mean we've got a pretty amazing business. I mean, we've got great assets. and we've got a great management team. And by and large, I mean, we've mostly got some great shareholders who have been around a long time. So bear with us, we're just on another cycle. We'll come out the other side of this. And we'll be in much better shape. Thanks, everyone, for joining us this morning.