Mineral Resources (ASX: MIN) has reported its half-year results for FY25, and while weaker iron ore and lithium prices weighed on the bottom line, the company’s Mining Services division continued to shine.

Revenue for the half-year came in at $2.29 billion, down 9% from the previous year. Underlying EBITDA dropped 55% to $302 million, reflecting the impact of softer commodity prices. The company also reported a statutory net loss of $807 million, largely due to impairments and foreign currency translation losses.

Despite the tough market conditions, MinRes maintained a strong liquidity position while continuing to fund its massive investment in Onslow Iron, a project that is shaping up to be a game-changer.

Mining Services Leads the Way

If there was a clear highlight in the results, it was Mining Services. The division delivered a record $379 million in EBITDA, a 49% increase on the previous year. Production volumes remained stable at 136 million wet metric tonnes, and MinRes continued to expand its contract base, securing two new agreements and renewing four existing ones.

The company also saw the first earnings contribution from the Onslow Iron Road Trust, adding $29 million to the Mining Services result.

Onslow Iron Gains Momentum, Despite Cyclone Disruptions

Onslow Iron is now generating positive cash flow, marking a major milestone for the business. The project produced 6.3 million tonnes in the half, with 4.6 million tonnes shipped.

In January, shipments were operating at an annualized run rate of 18 million tonnes, putting Onslow Iron well on its way to full capacity. However, Severe Tropical Cyclone Sean caused eight days of disruption, followed by further flooding that damaged parts of the haul road.

MinRes has opted to resurface the road with asphalt, a move that will reduce downtime and maintenance costs in the long run. CEO Chris Ellison remains optimistic about the project’s future, saying,

“Onslow Iron will significantly improve the quality of our earnings across commodities and mining services.”

Lithium Faces Market Challenges

While lithium shipments were up 28% to 261,000 dry metric tonnes, prices nearly halved, dropping to US$820 per tonne from US$1,719 per tonne in the previous year. Given the sustained weakness in lithium markets, MinRes made the decision to place Bald Hill into care and maintenance, preserving the orebody for better market conditions.

On the plus side, the company has focused on cost reductions, and these efforts started to show results towards the end of the half, just as lithium prices saw a modest recovery.

Energy Division Unlocks Value with Hancock Deal

The Energy division also had a busy half-year, securing a $1.1 billion transaction with Hancock Prospecting. As part of this deal, MinRes received an initial $780 million in December for the sale of key assets in the Perth and Carnarvon Basins. Further payments are expected as the transaction progresses.

Balance Sheet, Debt, and Dividend Pause

With major construction spending at Onslow Iron now peaking, MinRes is shifting gears towards debt reduction. The company ended the half with $1.52 billion in available liquidity and net debt of $5.08 billion. Given this focus on deleveraging, the board made the prudent decision to temporarily pause dividend payments.

Ellison addressed investor concerns, stating,

“Onslow Iron is now generating positive cash flow, allowing us to accelerate efforts to reduce debt.”

Looking Ahead

Despite a tough six months, MinRes is positioning itself for stronger performance ahead. Onslow Iron is ramping up, Mining Services is delivering record earnings, and cost-cutting in lithium is helping the business ride out the market downturn.

Ellison summed it up best:

“MinRes has a history of weathering storms and emerging stronger. We are well placed for improved performance going forward.”