Mineral Resources receives approval for $1.3 Onslow haul road sale

Mineral Resources (ASX: MIN) has received approval from the Foreign Investment Review Board (FIRB) for the sale of a 49% interest in the Onslow Iron haul road.

The minority stake in the haul road will be sold to investment funds managed by Morgan Stanley Infrastructure Partners (MSIP) for $1.3b.

Proceeds are payable in cash and comprise of an upfront consideration of $1.1b and a deferred consideration of $200m that is subject to achieving a 35mtpa run rate for any quarter before June 30, 2026.

Upon receipt of the $1.1b, MinRes will cancel its $1.12b (US$750m) undrawn bridge facility.

MinRes managing director Chris Ellison commented on the sale.

“Our partnership with Morgan Stanley Infrastructure Partners will release $1.3b of value from the haul road, highlighting the quality of earnings that Onslow Iron is set to achieve,” he said.

“Under this unique partnership, MinRes maintains majority exposure to the stable earnings that the haul road will deliver over the project’s life.

“Onslow Iron is scheduled to be operationally complete next month, with the ramp-up progressing to plan and the project cash flow positive for MinRes from October.”

MinRes revealed its intention to sell a minority stake in the haul road in early June 2024, which was subject to FIRB approval.

The 150km fully sealed and fenced dual lane haul road links the Ken’s Bore mine site to the Port of Ashburton and is equipped with fibre optic cabling to support Mineral Resources’ autonomous road trains.

Since first ore on ship was achieved in May 2024, more than 1mt of iron ore has been shipped from Onslow Iron.

Shipments are increasing in line with MinRes’ ramp-up plan, with 134kt exported in July 2024, 532kt in August 2024 and 720kt expected in September 2024.

Onslow Iron remains on track to reach its nameplate 35mtpa run rate from June 2025.