Mineral Resources Completes $1.1B Sale to Morgan Stanley

Mineral Resources has successfully concluded the sale of a 49% interest in the Onslow Iron haul road to Morgan Stanley Infrastructure Partners for AU$1.1 billion. This partnership is expected to enhance capital locking from its assets and yield stable earnings moving forward.

Date: 28-09-2024

AI Rating: 7

The transaction marks a significant cash inflow for Mineral Resources with an upfront payment of AU$1.1 billion, which could positively impact its financial position. An additional cash incentive of AU$200 million is possible contingent upon achieving a run rate of 35 million tonnes per year before June 30, 2026.

One critical aspect of the deal is the cancellation of Mineral Resources’ undrawn bridge facility of US$750 million with JP Morgan, which alleviates previous financial obligations and could enable better capital management.

Importantly, Mineral Resources preserves majority ownership and exclusive operational rights over the haul road, ensuring continued revenue stream and potential profit growth moving forward.

This partnership opens doors for stable earnings from the haul road, crucial for the Onslow Iron project, especially given its designation as one of the largest under-developed iron ore projects in Australia.

The Onslow Iron project is poised to significantly influence the iron ore market in the region, allowing the exploitation of previously stranded deposits, thus hinting at potential long-term revenue growth and sustainability.

Overall, this report presents much better prospects for the company with enhanced liquidity and operational focus, reinforcing its market position.

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