Mineral Resources (MinRes) has reported on its financial results for the half-year ended December 31 2022 – and the company is very happy.
MinRes reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of $939 million, a significant 503 per cent increase from the same period last year.
Underlying earnings after tax was for the company reported at $387 million, up from a deficit of $36 million in the same period last year.
MinsRes also reported an operating cash flow of $281 million, up from a $120 million deficit.
The board has declared a full franked interim dividend for March, valued at $1.20 per share.
According to the company, its strong performance was driven by record lithium earnings from the conversion of both Mt Marion and Wodgina spodumene concentrate into lithium battery chemicals, as well as regular iron ore operations.
The company has been understandably eager to expand its lithium operations.
MinRes also recently splashed close to $1 billion for an interest in lithium processing plants in China. The transaction, if approved, will see MinRes take a 50 per cent stake in Albemarle’s plants in Qinzhou and Meishan.
MinRes managing director Chris Ellison told the Australian Financial Review that the offshore investment would ensure the company could convert Wodgina spodumene into battery-grade chemicals in the short term.
“Doing more here in Australia is my preference over the long term,” Ellison said. “Any potential future hydroxide plant in Australia that could take our spodumene is some years off.
“We need capacity today.”
As part of the company’s dealings with Albemarle, MinRes is also in the process of restructuring its existing lithium operations closer to home.
Its 40 per cent stake in the profitable Wodgina lithium mine in WA will increase to 50 per cent. In return, MinRes will part with a 25 per cent share in the Kemerton lithium plant to Albemarle, leaving MinRes at 15 per cent.
“We are delighted to have reached these binding agreements, which cement MinRes’ place as a world-leader in lithium mining and leverage our partner Albemarle’s strong track record in battery chemical production,” Ellison said.