A rocky reporting season for Australia’s resources sector

FY25 was an intense year for the mining industry as it grappled with difficult price environments, rising trade restrictions and increased geopolitical uncertainty.

According to the Federal Government’s Resources and Energy Quarterly (REQ) June 2025, Australian resource and energy export earnings are forecast to decline by about 4% to $369b in FY26, down from an estimated $385b in FY25. A further fall to $352b is forecast in FY27.

As we moved into FY26, Association of Mining and Exploration Companies (AMEC) chief executive Warren Pearce spoke with The Australian Mining Review on the challenges and opportunities the mining industry faced in FY25.

Mr Pearce says the biggest challenge in FY25 wasn’t at the production end but rather the exploration end.

“We’ve watched investment not find its way to the explorers in any commodities or minerals, which has made [exploration] very difficult,” he said.

“That’s largely the same reason there are significant concerns around the direction of the global economy and whether there will be negative growth.

“Although the exploration industry can be high reward, it’s always a high risk. As a result, some people have stepped out of that while they try to wait and see what the future will bring.”

Golden goose

FY25 has seen several miners report record-breaking years. Gold has surged multiple times throughout the year, thanks in part to global uncertainty around aggressive tariffs driving investment into the industry.

Mr Pearce says gold has been the biggest winner overall in FY25

“Gold has pretty much outshone all other minerals in that space,” he said.

“We’ve watched investors run back to gold. We’ve also watched nation states continue to increase their stocks of gold, and that’s been exceptionally good for the gold price.

“As a consequence, gold companies have been pushing to increase production, driving significant investment and funding into new gold projects, all of which has been particularly rosy.”

Northern Star Resources (ASX: NST) reported a record-breaking FY25 marked by high gold prices, steady production and the acquisition of De Grey Mining’s (ASX: DEG) Hemi development project.

Although Northern Star faced productivity and cost challenges in FY25, the company met its revised production and cost guidance.

Total gold sold at Kalgoorlie Consolidated Gold Mines (KCGM) in FY25 of 418.8koz was down on the prior year with lower than planned productivity from the high-grade Golden Pike North area, driven by delayed access whilst the East Wall remediation works were completed.

Both lower mining productivity and delayed access were contributing factors in KCGM not achieving its original FY25 production and cost guidance. This was buoyed by strong performances at WA’s Yandal mine and the Pogo mine in the US.

Looking ahead to FY26, the miner says its ambitious 2moz group target set in 2021 will not be met, primarily because KCGM is not yet able to deliver 650kozpa as planned. Northern Star is confident that the target can be met in subsequent years.

Evolution Mining?(ASX: EVN) saw record high profit in FY25, driven by increased production alongside favourable commodity prices.

The?miner?has reported a statutory net profit of $926m, up by 119% from?FY24.

Evolution Mining produced 750,512oz of gold, an increase of 5% from FY24, and 76,261oz of copper, an increase of 12%.

High production is expected to continue, with guidance of 710,000-780,000oz for gold, 70,000-80,000oz for copper.

Copper recovers

Copper prices fell by around 15% in early April as new US trade barriers were announced. Prices have since recovered to near record highs and are forecast to increase to $15,014/t (US$9940/t) by 2027, according to the REQ June 2025.

The REQ June 2025 anticipates that copper demand will continue to rise while supply struggles to keep pace as new mines are slow to develop and trade barriers impact scrap supply.

BHP delivered record group copper production of more than 2mt, up 8%.

This swell was driven by strong performances across all operated copper assets, including a 16% production increase at Escondida, record production at Spence and record Q4 production from Copper SA.

BHP exceeded the top end of production guidance ranges at Escondida and NSWEC, while Spence, WAIO and BMA were all in the upper half of their production guidance ranges.

Copper SA achieved the mid-point of its revised production guidance, within its original guidance.

After delivering 28% copper production growth between FY22 and FY25, guidance for FY26 is between 1.8 to 2mt.

Coal hard truths

Shortly after the release of FY25 results, BHP (ASX: BHP) and Anglo American both announced significant job cuts to Queensland coal operations.

Isaac Regional Council Mayor Kelly Vea Vea says between the two cuts, about 1020 jobs have been affected.

“I don’t think that we should be complacent about what this means for the future of the mining sector and in particular resource communities,” she said.

“This is a huge issue, not just for the viability of the industry. It’s a huge issue for communities.”

BHP and Mitsubishi, as BHP Mitsubishi Alliance’s (BMA), will suspend operations at the jointly owned Saraji South coal mine with the operation being place in care and maintenance in November 2025.

The companies attributed the closure to consistently weak metallurgical coal prices and the impact of the Queensland Government’s coal royalties — a scheme introduced in 2022 when coal prices were significantly higher.

BMA president Adam Lancey says the Queensland coal industry is approaching a crisis point.

“As joint owners of BMA, BHP and Mitsubishi do not want to see operations paused or jobs lost,” he said.

“These are necessary decisions in the face of the Queensland Government’s unsustainable coal royalties and market conditions.”

Under the scheme, Queensland coal miners pay a royalty of 20% for prices more than $175/t, 30% for prices more than $225/t and 40% for prices more than $300.

BHP previously warned that the state of the Queensland coal industry could force the company to reassess mining operations throughout the state after it saw a 26% decline in attributable profit for FY25.

Anglo American is cutting more than 200 jobs across its coal operations in central Queensland and its Brisbane head office, according to the Issac Regional Council.

The company is Australia’s second largest steelmaker, operating five mines across Queensland, including the state’s largest — the Grosvenor underground coal mine.

Whitehaven Coal (ASX: WHC) delivered strong FY25 results, underpinned by the company’s growth and diversification driven by acquisitions across Queensland.

The company reported an underlying net profit (NPAT) of $319m for FY25 and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.4b, matching the EBITDA reported in FY24.

Revenue for FY25 was 53% higher than FY24 at $5.8b, of which metallurgical coal sales accounted for 64%, underpinned by an average coal price of $215/t.

Looking ahead, Whitehaven has set FY26 production guidance at 37–41mt, with a further $60–80m in cost savings targeted.

“Thermal coal prices have been recovering since June, and metallurgical coal markets have stabilised,” Whitehaven managing director Paul Flynn said.

“FY26 will be another exciting year as we continue to optimise operations and deliver on our goals.”

A mixed bag for iron

Weak iron ore prices drove record-lows for Australia’s majors.

Fortescue (ASX: FMG) reported its lowest profit since FY19 in the company’s FY25 results.

The company’s FY25 net profit after tax (NPAT) came in at $5.24b [US$3.4b], a significant drop from the $8.78b [US$5.7b] reported in FY24.

Despite this, Fortescue maintained strong operational performance resulting in record volumes across its supply chain, including iron ore shipments totalling 198.4mt in FY25, 4% higher than FY24.

In FY25, Fortescue continued to refine its green energy project pipeline to reflect global market conditions.

Following the cancellation of plans to progress its Arizona hydrogen project in the US and PEM50 project in Gladstone, Queensland, the company shifted focus to its green metal project in the Pilbara, WA.

Construction of the project is underway with a pilot plant set to begin producing green iron using green hydrogen.

Fortescue growth and energy chief executive Gus Pichot says green energy and green hydrogen remain key to the company’s future, including its green iron strategy.

BHP posted record-breaking production from its iron ore arm.

Iron ore production increased to a record 263mt. Production for FY26 is expected to increase to between 258 and 269mt.

WAIO produced 290mt (100% basis), overcoming the impacts of Tropical Cyclone Zelia and Tropical Storm Sean in Q3.

The ramp up of the second concentrator at Samarco ahead of schedule, also contributed to record iron ore production.

Critical hit

Mr Pearce says the critical mineral space has fallen out of favour in the last year.

“The long term, and even medium term, demand projections look strong, but it’s quite clear that growth has slowed, if not declined,” he said.

Despite record production in other commodities, BHP’s potash aspirations slowed.

The miner increased its estimated capital expenditure by at least $2b for the Jansen stage 1 potash project (JS1) in Canada, which had an original capex of $8.75b (US$5.7b).

BHP attributes the increased price tag to inflationary and real cost escalation pressures, design development and scope changes and lower productivity outcomes over the construction period.

Now 68% complete, BHP estimates capex for JS1 to be in the range of $10.7b – $11.3b (US$7b – US$7.4b) and first production to revert to the original schedule of mid-CY27.

Given potential for additional potash supply coming to market in the medium-term BHP is considering a two-year extension for the execution of Jansen stage 2 from FY29 to FY31.

Despite weak lithium market conditions, Pilbara Minerals (ASX: PLS) reported record spodumene production of 754.5kt and a 7% increase in sales in FY25.

PLS recorded $769m in revenue, a 39% decline from FY24 results driven by a 43% decrease in the average realised price of lithium, underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) decrease of 83% and an underlying net loss of $88m.

“The long-term fundamentals for lithium remain intact,” PLS managing director and chief executive Dale Henderson said.

“While market volatility may persist in the near term, our confidence is anchored in what we control — disciplined execution, operational excellence and strategic agility.”

During FY25, PLS expanded its international footprint with the acquisition of Latin Resources and the Colina lithium project in Brazil and advancing its Ngungaju plant in South Korea, a downstream joint venture with POSCO.

Mineral Resources?(ASX: MIN) met FY25 production guidance across its iron ore and lithium operations amidst significant leadership transition.

FY25 production volumes were 280mt, up 11mt year on year, and at the lower end of the guidance range (280 – 300mt).

The Pilbara Hub achieved FY25 shipments of 9.7mwmt at the upper end of guidance (9-10mwmt).

Total quarterly attributable spodumene production across both operating lithium sites was 144kdmt, with shipments of 135kdmt.

Significant impairments and subdued product markets drove a $955m full year net profit loss for IGO (ASX: IGO).

The FY25 results include IGO’s share of net loss in TLEA, including full impairment of the Kwinana refinery assets ($605m) and derecognition of deferred tax assets relating to Kwinana ($58m).

Additional impairments include $115m of exploration assets and a $58m increase in the company’s rehabilitation provisions for Nova, Cosmos and Forrestania.

The results reflect challenging conditions in key markets with average realised spodumene price down 64% and average realised nickel price down 10%.

The operation continued to deliver strong margins despite market conditions, with a full year earnings before interest, taxes, depreciation and amortisation (EBITDA) margin of 66% (FY24: 85%).

“The global lithium market was weak throughout FY25. Nevertheless, Greenbushes demonstrated it is a world class asset with an EBITDA margin of 66% and strong cash conversion,” IGO managing director and chief executive Ivan Vella said.

“We believe market fundamentals for lithium are positive and Greenbushes is well placed to capitalise.

“We are working with our partners to achieve its full potential including delivering CGP3 — the next phase of growth.”

Lynas Rare Earths’ (ASX: LYC) net profit after tax fell to $8m for FY25, a sharp decline from $84.5m in FY24.

The miner has cited depreciation on plant and equipment at its Kalgoorlie facility and Mt Weld coupled with lower than nameplate production at the Kalgoorlie facility as contributing factors.

Lynas also noted its significant uncertainty as to whether the construction of its heavy rare earth processing facility at Seadrift, Texas in the US will proceed and if so, in what form.