Mineral Resources’ Walters Drive building. Credit: Mineral Resources.

Australia’s Mineral Resources is cutting expenses to endure a period of low lithium prices after reporting poor financial results this week. 

However, the company’s managing director, Chris Ellison, stated that the company is not in a state of panic. 

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On 29 August, the iron ore and lithium producer reported a 40% decline in earnings and a 79% decrease in underlying net profit after tax at A$158m ($107.4m) for the year ending June 2024. 

Revenue actually increased 10% to $5.3bn, attributed to the growth in mining services revenue from Onslow Iron construction and higher iron ore revenue, although this was offset by weaker lithium pricing. 

According to media reports, Ellison told analysts during a briefing in Sydney on Thursday that the company was in a tough market… in one of those downturns [so] you just need to close your eyes and [admit] we are in a downturn. No one is making money.” 

Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to $1.1bn, while the statutory net profit after tax stood at $114m. 

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The protected lithium price decline has led to other mines shutting down, but Mineral Resources is responding by significantly reducing expenses and foregoing dividend payments to shareholders for the first time in more than a decade, according to the company’s spokesperson. 

At the beginning of the financial year 2025, it will conclude the Onslow Iron project’s construction phase and aim to increase production to 35 million tonnes per year by June 2025. 

Ellison said: “Onslow Iron achieved its first ore on the ship ahead of schedule in May, just 11 months after we broke ground at the Ken’s Bore mine site.” 

Ellison added that the company will “continue to take a conservative approach during the full year 2025, deferring expansion projects and focusing on cost reduction and cash preservation. This approach was reflected by the board’s decision not to declare a final dividend for full year 2024.”