Okay, good morning, everybody. My name is Kim Collard, and it's my role and responsibility to welcome you all here to Country. I'd like to begin by acknowledging and recognizing MRL, Mineral Resources Ltd, for acknowledging and recognizing the traditional custodians whose land we gather upon this morning, the Whadjuk people of the Noongar Nation.
[Foreign language]
My name is Kim Collard, and I'm an elder of the Whadjuk community. For those who don't know, Noongar, the people of the southwest of Western Australia. S o geographically, if you were to draw a line just south of Geraldton to as far east as Esperance, that's what we talk about when we talk about Noongar Country. Whadjuk are the traditional custodians of the Perth Metropolitan Area, and they're one of 14 different clans of the Noongar Nation.
Our role here today as traditional custodians is to look after you, is to care for you, and to nurture you whilst you're on our traditional homelands. A nd as a result of that, we take that responsibility very seriously by placing in the hands of James McClements, the Chair of the MRL board, and the board to look after you every day this morning.
So, [Foreign language] Chairman, Mr. James McClements, MRL. [Foreign language] other board members in particular reference to Colleen Hayward, [Foreign language] my Noongar sister. [Foreign language] Managing Director, Mr. Chris Ellison, shareholders, other stakeholders to the 2024 MRL AGM. [Foreign language] We are on Whadjuk land. [Foreign language]
I see it in our ancestors, our grandmothers, our grandfathers' feet have traveled this land for thousands and thousands of years, and it's the tracks of our ancestors that we still continue to follow today. [Foreign language] board members, shareholders, [Foreign language] 2024 MRL AGM. To the many leaders, shareholders, other stakeholders, we welcome you here to the 2024 MRL AGM.
[Foreign language] I say to you that our God, our Creator, is the Rainbow Serpent of the world. Your name for that place is called the Swan River. Our Noongar name for that place is called the Derbarl Yerrigan. It is a site of great cultural and spiritual significance to Noongar people, and our God, our Creator, the Rainbow Serpent, will look after you and protect you like an eagle whilst you're on Noongar Country, whilst you're on Whadjuk Country.
In conclusion, can I just once again acknowledge MRL for recognizing the traditional custodians, the Whadjuk people of the Noongar Nation, remembering also that MRL's footprint is also on the lands of Ngarla and Yamatji, Kariyarra, Nyiyaparli, Marduthunera, and Thalanyji Country, just to name a few.
I bring with me today, James and Chris, well wishes from the elders of the Noongar Nation in wishing you well in your deliberations today. I also acknowledge the good work that you do in working with and alongside many of those traditional owner groups in creating business and employment opportunities and encourage you and the board to continue the groundwork that has been established.
I take my hat off to your industry, mining resources, oil and gas, in leading the way in creating business and employment opportunities, and particularly to the Aboriginal business sector and a key plank for MRL's supply chain groups downstream.
I just want to leave today's meeting with a sense of calm, a sense of dignity, and a sense of respect. You have a packed agenda today. S o, it's given me a great deal of responsibility to hand it over to James to follow this meeting. Thank you very much.
Thank you, Kim, for that wonderful Welcome to Country. Great to see you again. Kim and I have a little history. Good morning, everyone, and welcome to the MinRes 2024 Annual General Meeting. My name is James McClements, and I'm the Independent Executive Chair of the MinRes board.
I'd like to start this meeting by paying my respects to the Whadjuk Noongar people, the first and continuing custodians of the land on which we meet today and pay my respects to elders past and present.
Today's AGM presentation aligns with the theme of our 2024 Annual Reporting Suite, which acknowledges one of the most significant development years in our company's history, headlined by the delivery of the Onslow Iron Project. This year's theme also celebrates the next generation of our MinRes workforce, our apprentices and graduates who are helping to write MinRes' next chapter.
This morning, I'm joined on stage by the MinRes board and senior leaders. Starting on my right, Chris Ellison, MinRes Founder and Managing Director, independent non-executive directors, Zimi Meka, Susie Corlett, Colleen Hayward, and Justin Langer, AM. Please also welcome our newest independent non-executive directors, Denise McComish and Jacqui McGill, AO.
They're joined by Mark Wilson, our Chief Financial Officer and company secretary down at the end there. Welcome all. Our MinRes Executive team is also in the front of the room or at the front of the room with us. Mike Grey, Chief Executive Mining Services, Darren Killeen, Chief Executive Engineering and Construction, Chris Soccio, Chief Executive Iron Ore, Josh Thurlow, Chief Executive Lithium, Darren Hardy, Chief Executive Energy.
Across to my right is also our General Manager, Investor Relations, Chris Chong.
You can see him standing up over in the corner there, who is on hand to read out pre-submitted questions and questions submitted online during the meeting. I acknowledge this year's AGM brings heightened interest from our shareholders and appreciate many of you will be keen to ask questions or make comments during today's proceedings.
You will most definitely have the opportunity to ask questions, and you will be heard. I also want to make it clear that I intend to make sure that the meeting remains respectful at all times. I know there's been a lot of emotion around some of the issues, and we understand why that is the case, but I would also ask everyone to be respectful throughout the meeting.
I think it is appropriate to commence today's meeting by addressing recent events in the company and announcements made by the board in relation to MinRes's governance matters, including those concerning our Managing Director.
On behalf of the board, I'd like to also acknowledge the impact recent months have had on our shareholders, be it damage to our shareholder value or jeopardizing your trust in the confidence in the company's ability to comply with its obligations and generate sustained returns.
I'm going to deal with all of these matters at some length, but I just want to open with what I'm sure is on everyone's mind. The last few months have quite obviously been quite difficult for our company and our shareholders. Significant price falls in our key commodities, iron ore and lithium, have demanded quick, decisive responses.
At the same time, your board has been managing the challenges raised by the governance issues. For us as a board, it certainly wasn't easy getting to the facts and landing on a decision that, as a priority, protects the interests of our shareholders, while also acknowledging that significant improvements to corporate governance need to be made.
I would like to start with a few things that I believe are important. Firstly, from time to time, Chris lacked judgment and used company resources for personal matters. The board accepts that Chris's intention was never to cause detriment to the company or its shareholders, and there were processes in place for amounts to be repaid to the company in a timely manner. The board also decided, and Chris has agreed, that these practices will not continue.
Secondly, as we made clear in our statement of November 4th, there have also been occasions, including in respect of historical dealings with Far East Equipment Holdings Limited and the subsequent personal tax implications where Chris lacked the judgment and integrity that we'd expect of our Managing Director. This resulted in a range of financial penalties that we felt were appropriate and warranted in the circumstances.
Thirdly, your board is continuing to review all transactions with key management personnel and their related parties. Those related party arrangements that remain in place will be subject to rigorous independent testing to reaffirm that they deliver compelling commercial benefits to the company and are in the best interest of shareholders.
Fourthly, and I think a key tenet of what we have announced to the market is we've established an independent Ethics and Governance Committee, which will, with independent expert advice, oversee a renewed focus on compliance and a strengthened whistle-blowing process. We also focused on, sorry, fifthly, we've also focused on continuous improvement in the transparency of our disclosures, in particular around related party arrangements.
Our recent related party disclosures in our financial statements, as well as our 2024 corporate governance statement, speak to the improvements that we have made in this area already. But this is not at the end of the road, and we are committed to further enhancements that will demonstrate our progress towards even stronger corporate governance.
And finally, I want to acknowledge the vital contribution that Chris makes to the company's operations, growth, and shareholder value creation.
The decision that the board was faced with making was complex and challenging. We unanimously believe that our conclusion carefully balances the need to acknowledge wrongdoing and the need to ensure significant improved governance protocols are put in place while also protecting your company's value and a timely way forward for leadership transition. Despite the present challenges, this is also a time of significant opportunity and a critical turning point for our company.
Everyone within our organization, including Chris, is committed to ensuring the longevity and success of this business. Our job now as a board is to rebuild and proactively address the impact of these events. Shortly, I'll take you through the progress we've made on these matters, the prudent steps we've taken to strengthen MinRes and some significant changes to how MinRes operates.
Governance has been a major focus of the board, especially in the past two years, and the new directors you see here today are part of the move to provide a governance regime that is appropriate for MinRes today, a much larger company than it was five years ago. The rigor of our corporate governance practices and procedures must continue to mature in line with the rapid growth of the company.
As you'll be aware, the board has been investigating a range of allegations and governance matters that have emerged over time. These are serious matters pursued with the assistance of independent external support, and they resulted in a strong and comprehensive response from your board.
A major focus has been understanding Chris's historical private tax matters, along with MinRes' sinvolvement with private companies with which Chris has a connection, to fully understand any impact on MinRes's resources or MinRes's and your interests as shareholders. A range of allegations have emerged from several sources, including the media. Our commitment has been and remains to examine each of these issues in detail, understand their impact, and take appropriate steps when we've established the facts.
On the 4th of November, the board provided a detailed ASX announcement on these matters. This included our conclusions relating to Chris's conduct and several priority actions supporting our comprehensive response. In making decisions and taking appropriate actions, the board prioritized the interests of the company, including our shareholders, many who have made their views clearly known.
The board also considered the views of broader stakeholders, including the importance of our employees, our customers, and other stakeholders in managing and supporting an orderly transition. Most notably, among the outcomes, the board decided that it is in the company's best interest to accelerate our leadership succession across the Chair and Managing Director roles. As a result, I will step down as Chair once a suitable successor is identified.
We intend for this to occur before the 2025 AGM, which would mark my 10 years of service on the board. It is appropriate that the new MinRes Chair be heavily involved in the recruitment of the next Managing Director, and as such, the appointment of my successor will be an immediate priority for the Nomination Committee. Succession planning for the Managing Director has been underway for some time, supported by an international recruitment firm.
However, the search for a suitably qualified successor will now be accelerated. We aim to complete this process within the next 12-18 months. The board's announcement on 4th of November also acknowledged how MinRes's rapid growth, particularly over the last five years, has placed pressure on the company's governance systems and processes.
While work has been ongoing to uplift these systems, we also recognize the need for accelerated change to better reflect MinRes's status as a major ASX-listed company.
As an immediate action, MinRes has introduced an independent ethics and governance committee to the board. This body now oversees the company's compliance efforts and supports MinRes's ambition to meet the highest legal and ethical standards going forward. The committee charter can be assessed on our website. Committee members include independent non-executive directors, Denise McComish as Chair, Susie Corlett, and Jacqui McGill.
This committee's responsibilities include reviewing transactions involving key management personnel and their related parties and enhancing internal controls, overseeing internal and external investigations, coordinating investigations into outstanding matters, and strengthening conflicts of interest procedures. It is important to note that some investigations are ongoing. The board is committed to understanding the facts and identifying where improvements can be made.
We'll continue to report these matters in line with our disclosure obligations. External work or external support for this work is being provided by legal and financial specialists. The committee has also established new whistle-blowing protocols, which it will independently oversee.
It has also engaged Elizabeth Broderick & Co to conduct a confidential cultural assessment among senior executive staff to identify areas for improvement, essentially how the organization can operate better. Beyond the ethics and governance committee, a new governance-focused internal function will be established, reporting directly to the board.
This function will be responsible for implementing compliance practices and processes while also overseeing the company's whistle-blowing processes. I hope you can see that the board is committed to strengthening MinRes's governance framework and prioritizing the best interests of shareholders now and into the future.
Furthermore, the company remains focused on generating value over a long-term horizon and working ethically in partnership with the company's clients, customers, people, and communities.
On 4th of November, on our 4th of November ASX announcement, we also detailed a range of financial sanctions imposed on Chris, which reflect the serious nature of the investigation's findings to date. These include forfeiture of future incentives, payment of a financial penalty to MinRes, and ongoing charitable donations. Chris has fully accepted the board's decisions and will continue to work in the best interest of MinRes and its shareholders through this transition period.
He has publicly apologized and deeply regrets the events that have occurred and their impact on MinRes's reputation. On related party transactions, the board has decided that MinRes will take steps to exit or unwind existing arrangements that no longer have a compelling commercial benefit for the company.
For example, MinRes has leased commercial properties from a consortium led by Chris and has done so since its listing in 2006. These properties are strategically and operationally important to MinRes, and the MinRes's leases are at arm's length and on commercial terms.
Nevertheless, given the feedback from investors around minimizing potential conflicts of interest, Chris and the other investors in those properties are offering the properties for sale on the market.
Another arrangement under review is the Northern Gateway Master Trust, in which MinRes is a 49%- unit holder and where a consortium led by Chris owns the remaining 51% of the units. The acquisition of units in the trust was not a related party transaction. MinRes acquired its stake from Goldman Sachs at market rates, supported by an independent valuation.
Other arrangements that are under review relate to ship agency services, a shipping agency owned by Chris's daughter, and Resource Development Group Limited, 64% owned by MinRes and whose Managing Director is Chris's brother.
The future of all transactions or arrangements of this nature is that they won't exist unless there is a
strong compelling business reason to retain them, and any arrangements would need to be arm's length and on strictly commercial terms with regular oversight and independent review.
Now I'm going to move to the process of enhancing board expertise. The board's expertise has been enhanced through the addition of Denise McComish and Jacqui McGill as independent executive directors appointed in December 2023 and January 2024, respectively. Denise brings to our board outstanding and comprehensive experience across audit, risk, and corporate governance, notably in the mining, energy, financial services, and infrastructure sectors.
She is a fellow of Chartered Accountants Australia and New Zealand, and in 2018 was recognized in the Top 100 Global Inspirational Women in Mining. Denise has been a terrific addition to the board. I'm now pleased to invite Denise to speak about her skills and experience that she brings to the board. Denise.
Good morning, everyone. As James said, my name is Denise McComish, and I'm pleased to nominate for election to the Board of Mineral Resources, which I joined in December last year.
These are important times for your company as you manage operational, financial, and reputational impacts arising from low commodity prices and serious governance issues that have dominated media and market attention in recent weeks. Against that backdrop, I believe I bring to my position on the MinRes board skills and experiences in risk governance and oversight that are importantly needed. In that context, I Chair the Audit and Risk Committee and now the Ethics and Governance Committee.
As background, I was an audit partner with KPMG for more than 30 years, holding several leadership roles, including the national mining leader. I've seen a lot in my many years as an auditor of major companies across many industries and in resources, particularly. I have a breadth and depth of understanding of what's needed for success, both in operational and financial performance and exemplary behavior displayed by those in charge.
Since retiring from KPMG, I've joined a number of boards and am currently a non-executive director of Gold Road Resources and Web Travel Group. I also serve on the board of WA's energy retailer and generator Synergy and the National Mental Health Organization Beyond Blue. I've been a member of the Australian Takeovers Panel for almost 12 years.
This is the dispute resolution tribunal for corporate takeovers in Australia, and again, I have significant experience in understanding complex and challenging corporate transactions. This has been a challenging time for the company and for me personally, but I believe I can continue to contribute significantly to the operational, financial governance and reputational success of the company for the benefit of our shareholders and for all of our stakeholders. Thank you for your support.
Thank you very much, Denise.
Denise has been a very important member of the board over the last four or five weeks that we've been dealing with these matters. Your appointment brings outstanding expertise to our board and company, and we're pleased to have you up for election today. The board, with Denise abstaining, unanimously supports her election and recommends shareholders vote in favor of this resolution later in the meeting.
Jacqui McGill is a highly credentialed executive and non-executive director with more than 30 years of strategic and operational experience in large-scale operations in the mining and the resources sector. In 2020, Jacqui was recognized as an officer of the Order of Australia for a distinguished service to the mining sector and advocacy for gender equality and workplace diversity.
As mentioned earlier, Jacqui also serves as a member of our Ethics and Governance Committee. Jacqui has been a great addition to the MinRes board.
I'm pleased to invite Jacqui to speak on the credentials and experience she brings to the board. Thank you, Jacqui.
Thanks very much, James. Hello, everyone. My name is Jacqui McGill, and I've nominated for election as a director, having joined the board on 31st of January this year. As Denise mentioned earlier, this has been a year I didn't expect when joining, and it's been full of unexpected turns and challenges and things I frankly couldn't have contemplated when I came on board.
As the Chairman has noted, I'm now playing a central role in the process to ensure MinRes has the strongest possible governance processes and arrangements. I'm proud to be part of that and I'm committed to achieving strong outcomes, and I'm confident that our direction is the correct one. Now, none of this was why I joined the board of MinRes.
That was really down to my mining background and the skills and experiences and track record managing large-scale mining projects. I've been in the industry for about 30 years, and most of that with BHP.
And in that time, I've had ultimate responsibility as chief executive operations such as Olympic Dam, which is one of the most challenging projects, I believe, on the planet, and businesses such as Mitsui Coal, where I was also chief executive.
I've worked in iron ore, in gold, copper, coal, and uranium, and operated across the management spectrum in operations, business development, project management, and technology, which is a growing part of how we do what we do and how we do it efficiently. I also pride myself in being a leader who believes that truly great cultures deliver great things.
I believe that great cultures are created by creating the right tone from the top, from the board of directors all the way through to our frontline leaders. Those cultures need to be inclusive and diverse to create value. As a non-executive director, I'm a member of the boards of New Hope Corporation, Gold Fields Limited, and 29 Metals. So, I've got good visibility across the spectrum of commodities and geographies.
I'm also Chair of Gold Fields' Social Ethics and Transformation Committee, whose charter is to assist the wider organization and board with issues such as ethics, security, labor, transformation, community, human rights, and stakeholder relationships. Gold Fields is a big company, and this committee has big responsibilities with big expectations. Now, MinRes has been an extraordinary success and notwithstanding recent events, which are being properly addressed, it has a great future.
This will rely upon all the ingredients of its success to date, but a different way of doing many things across management, governance, and things more befitting an organization of this major scale. So my contribution to the board is broad, but at its core is a mix of deep mining experience at a major scale and a deep understanding of the manner in which companies need to be managed for sustainable success.
I would be delighted to continue contributing to MinRes on your behalf, and I thank you for your support.
Thank you very much. Again, thank you very much, Jacqui. Again, we understand that the last four or five weeks have put a huge burden on our directors in terms of their time relative to their other commitments and very much appreciate the time and effort that the board members have been putting in.
You're a very welcome addition to the MinRes board, and we're pleased to have you for standing for election today. The board, with Jacqui abstaining, unanimously supports her election and recommends shareholders vote in favor of this resolution later in the meeting.
Shortly, I'll ask Managing Director Chris Ellison to provide a statement and deliver a business update. Before I do, I'd like to acknowledge that while governance issues have dominated media and market discussions in recent weeks, the 2024 financial year also saw major developments and achievements for MinRes.
Our Onslow Iron project has now been delivered and even in its early ramp-up stages is cash flow positive on a project basis and on track to meet nameplate capacity from June 2025. This is a significant achievement by management and creates a long-term platform from which MinRes will aim to deliver exceptional value to our shareholders.
Against a backdrop of commodity price pressure, MinRes has also responded quickly and appropriately to protect and ensure the long-term value of our projects. The fast, nimble entrepreneurial approach that has underpinned the company's growth and success has continued, this time to keep our operations stable and preserve value until prices rebound.
In a project sense, this approach is all about avoiding complacency, remaining focused on our balance sheet, and actively managing our portfolio, this year unlocking up to AUD 2.5 billion in capital. Your board is committed to significantly strengthening our governance structure, processes, and outcomes.
However, we're very proud of the achievements of this management team in creating a company of the depth, breadth, and success of MinRes. I now invite Chris to address today's meeting. Thank you, Chris.
Thanks, James. Much appreciated. This is MinRes's 19th AGM.
I've attended all of them, and I look out in the crowd. I've got some familiar faces out there. It's good to see us all around again, especially over the last four or five years. It's been traditional. I welcome David and Tracy Bowden. They come on board, as Kerry Stokes would say, the most important contributors to fundraising. Around Telethon is all of the mums and dads and kids, the families.
What's important to me is to be able to deliver for people like David and Tracy and contribute to their super scheme and know that they've got a great investment in the business. So welcome, everyone. Whether it's your first or your 19th, it's good to have you all here. First, I'd like to pay my acknowledgements to the traditional owners, the custodians of the land that we're gathering on today, the Whadjuk people of the Noongar Nation.
I would like to recognize their continued connection to the land and the beautiful land and water and the place where they have never ceded sovereignty. I pay my respects to elders past and present. So good morning, everyone. Thanks for joining us today. Chris Ellison, I'm the Managing Director and I'm the founder of MinRes.
This morning, I'll just give you a run-through of what we've done over the last 12 months and what the important issues are going forward in the immediate future. I think firstly, let me follow on from James, and I'd like to talk about the issues that are spread across the news.
Many years ago, I was a partner in a private company and made a judgment error with reporting of personal tax. I later went on to self-report it.
Subsequently, I paid the penalties, interest, and tax, and that was all due and payable. So, I put that behind me, and I deeply regret the impact this has had on the business and our people. I can't stress enough how much I hate what I've done, and I'm a dark cloud in my life that I'll live with forever, but regardless, I want everyone to know I deeply regret that error and judgment that I made back there.
Just let me have a minute. I want to assure the shareholders also, as James said, that any personal expenses I've ever had in the business have always been paid for by myself and always repaid promptly. S o, for the last 32 and a half years, I've pretty much dedicated my life to this business. It's a business I love. I have a huge passion for it.
My focus has been on building a great Australian company. I'm proud of the value that we've created and the changes I've brought to the industry and the return I've provided to my MinRes shareholders. Incredibly important. Looking back, I accept things could have been and should have been a lot different, particularly around corporate governance. There's no question of that. We grew rapidly, particularly over the last five years.
But I've got a great board. They've put those measures in place. I've got a very experienced, diverse board that knows exactly what to do. Those measures are in place now. I've made some mistakes along the way. I own those mistakes, and I'm standing here. I take full responsibility for them. That won't change. I've built a great company. I've delivered extremely good returns to the MinRes shareholders.
I've employed thousands of people and created a great working environment for my people, both here and Perth, and we're growing that experience out on site, and I've provided huge benefits to Australia, and this business will keep doing that for a long time to come. We have a very strong board, and they will ensure the ethics and governance are very strong going forward. I support the board fully.
I was part of each and every member joining. I was very happy to have them all on board. I'm more than happy that we've got such a great board. So, I support them, and I continue to manage this great business with all my capability and energy through the transition phase, and I look forward to doing so. So, that's the suspense for that part of it. Again, I say to everybody that's been affected, I'm deeply sorry.
We're going to show you a short video now to try and give you and bring you into our world and see through our eyes what Onslow Iron's turned out. So, can we roll that, please? Well, I mean, that gives you a little bit of insight into our world. It's an amazing project. I'll talk about it through where I'm heading. Operationally, the last year has been the most significant in our 32-year history.
We've made a lot of progress. We've had some downturns in the lithium, we know that, but building Onslow Iron has been unbelievable. The culmination of that project that you've just looked at is a lot of hard work by a lot of people inside MinRes from when we first developed the project. I'm not sure if anyone's aware that project has been lying around out there since probably 2004.
It's been more than AUD 750 million spent on 17 studies to try and figure out how to get it going. MinRes come along in their normal traditional style, and we did a study that was about three months long. I'm not sure if we spent more than AUD 500,000 on it. I'm sure we didn't. But within three months, we sort of had a study done.
Within six months, we had had an agreement put in place with the owners, the partners that are now part of the project. And it's through that MinRes culture that we can take something like that, and we can turn it into something pretty special. So, it was built in record time. The supply chain and the innovation are now proven.
Everyone had a few doubts with the transshipper's work. How does it all work with the highway?
But all of that's in operation and working. I mean, they're operating above nameplate capacity, and that nameplate capacity is a bit of a guess at what we think they'll do, but reality is that they're doing better. We've actually built, and I don't think the market really gets it yet. We've actually built a 35-million-ton iron ore mine that's going to last more than 50 years.
If you think about it, have a look at the biggest mining companies in the world. What's the staple commodity that sits behind them that makes them the greatest and biggest company in the world? And it's iron ore. It's pretty boring. It's pretty easy. There's nothing not like dealing with lithium or copper.
But we've got a 35-million-ton mine that's going to last more than 50 years, and it's going to make money every year from now.
How many businesses have got that sort of business sitting inside them that's going to generate that? The project right now, it's operational pit to ship. So, first haul went on board in May, well ahead of time. Focus now is in getting this up to 35 million tons. I won't talk too much about Onslow Iron now. I'll come back to it a bit later. But it was all made possible by the MinRes innovation.
I mean, this is not a traditional iron ore mine. It couldn't afford a deep-water port. It couldn't afford heavy haul rail. It needed innovation, and it needed cost-effective innovation that gets this down in the lower cost quartile, and that's what we've achieved. So, it's the typical MinRes type of project.
It's when we can go along to someone that owns an ore body and we go, "Give us your ore body. We'll bring our innovation. We'll attach some Mining Services for the next 10 or 50 years."
So, we own the Mining Services, we own the infrastructure, and we own a chunk of the mine. So that's our typical model. On the external, it's not all good news for the year. Externally, the price of lithium has continued to decline. We've seen a bit of a leveling of that late, but that's been challenging. We have seen the iron ore price. It's come off from around $130 a while back. $130 was kind of elevated.
It's one of those nice-to-be places. It's sitting around $100 a ton now, and it's not anywhere that we're unhappy with. I've been through three iron ore downturns since I've been in the mining business. I've been through three quicker lithium downturns in quicker succession.
Every time we've had a downturn over that period of time, the company's come out stronger and better. I don't think this is going to be any different. We're guiding it through. We always have to react to market conditions, and we're doing that very quickly. Balance sheet remains in good shape. Mark will talk about that shortly.
This time next year, I think everyone will be thinking, "What was the problem with the balance sheet?" But let's get there. Immediate priorities at the moment: reducing costs, improving performance, ramping up Onslow Iron, and growing the mining services business. We continue to invest in our people, safe working environments, the industry-leading experiences, setting new industry standards, attracting good people, and supporting business productivity.
I mean, all high priorities for us, and we've achieved a lot in that area over the last few years.
We've got a great senior leadership team in the business. They've been around a while. They work well together, highly experienced, and they get the MinRes culture. It's great. I mean, James, I won't go through them again. James read them out before. They're down the front. I encourage us to catch up with them after we finish the formal business.
And again, sitting behind our five CSOs, CEOs, we've got our new leadership team that we've brought up through the business into director roles. So, Tim Picton, Andrea Chapman, and Ivor Jezdik. Ivor, are you here somewhere?
So, Director of Strategy and Growth, and Tim Picton. Andrea is leading our people, and she's also overseeing health training and a bunch of other things as we go through the period of time. And Ivor's looking at a Technical Director looking after mainly around strategic exploration and mine planning.
Great additions to the business, great experience. Our leaders are committed and focused on executing and delivering best outcomes for all of our shareholders. Very little turnover in our management. It's a very tight team, and the communication and coordination, cooperation is exceptional. We're agile. We've got a can-do culture, and we have that right across the business.
Most of you will be familiar. We operate business pillars within the group, each led by one of the CEOs sitting here with us today. MinRes has grown significantly in the past five years. Today, we've turned into more of an infrastructure business than a mining services business. Our underlying DNA is contractor-based.
We have that can-do mentality, and we can get pretty much we think we can get anything done, get anything built, and we can get it done at a cost that's at the bottom end on industry standards. In-house capability is our competitive advantage. We're probably one of the only mining companies I know of in the world that has got the design, engineering, construct expertise that we've got.
So, we can go build a project and get it on the ground for a fraction of the cost of our peers in the business, and we do it for them as well. So huge advantage. All of the pieces of the puzzle all kind of fit together. One works extremely well with the other. So, I'll talk about each of them briefly. The mining services, it's one of the largest mining services groups in Australia and probably in the world.
It's the world's largest crushing contractor, record earnings in FY2024, and the business is transitioning through to with the Onslow Iron, another new project we've brought on board. So, from early 2024 to the end of 2025, that business is doubling in revenue every year and scale. 70% of the contracts we have sitting in there range in the 20- to 50-year range. So, that's sort of getting it into an infrastructure-type business.
We're starting to own rail port, sorry, roads and port, all of those sort of long-term sticky assets. Engineering and construction, more than 25 years of experience sitting inside MinRes. It grew from a minnow as MinRes did. It's probably the last Australian engineering construction company that will still go out there today, and we'll put a fixed number on a project and go build it. Most of the others don't.
It's all cost-reimbursable, soft and fluffy, and there is no end to the price. That's why they run overpriced. We own all our own equipment, so we have total control over the project. If we get held up in one area, we just simply move stuff around, and that's how we can sort of manage our budgets well. Most of the capital that we spend, we get more than AUD 0.90 in the dollar onto site in the ground.
And again, very rare. So that's our competitive advantage of being able to go and joint venture or partner up with organizations that have got good ore bodies. Lithium, we're the second largest hard rock lithium operator in the world. We've got three hard rock mines operating in WA. It's a tough market.
Our focus right now is on cost and efficiency. S o, pulling every dollar out of there that we can in costs and trying to make sure that we have them ticking over, and we've got them conditioned ready for the upturn, and the upturn will come. We're now putting Bald Hill and care and maintenance. You would have read about that.
Not a great result, but we have to pull product out of the market, and we have to get the costs and conserve cash. The iron ore, we're transitioning to a long-life, low-cost, high-value operation with the add-on of Onslow Iron. It's operational, as you know. It's ramping up.
We're shutting down high-cost operations in the Yilgarn, so that had to happen. The ore bodies down there are thin. We're over 200 kilometers from north to south that we're operating down there, so the costs are high.
The long-term focus is obviously in the Pilbara region. Energy, been a good year for energy. We've made the sale of two of the tenements we've got in the Perth Basin with some gas and oil in them to Hancock. The JVs, there is a remaining JV that we're putting together on the other eight tenements and the Carnarvon Basin with Hancock, so it'll be a 50-50 JV.
Both of those regions are highly prospective, and we expect to find a lot more success in them in the next year or two. People and safety, the business is driven by our people. It's the heart of MinRes. I mean, it's the culture. It's what makes us what we are today. The challenges this year have forced tough decisions. We've said goodbye to a lot of good people.
We continue to promise a prioritized safe and supportive environments where our people can thrive. We're in the top 5% of the mining industry in terms of the way we have the results we get with our safety. Our TRIFR is about 2.96, extremely low when you consider over the last 15 or 18 months. We've blended about 2,500 construction people into that area.
They're a mobile workforce. They typically move around. We've got a lot of permanent people that stay with us, but a lot of the mobile workforce moves around the country on different projects. So, we've got to make sure that we can control that, and they work to our culture and the safety systems that we run. The workforce in 2024 peaked at 8,500 people. That includes 2,500 to build Onslow.
The tough decisions we've had to make, obviously, is winding down the Yilgarn, about 900 of our people down there. Some of them are getting relocated to other areas, but a lot of them are taking redundancies, and again, we've reduced the headcount and head office for all of those people that are supporting these sites that we're winding down or pulling back on.
A nd the Bald Hill, of course, going on care and maintenance. We're losing about 250 people out of there, so not a good time. I mean, we had to build a business and to make sure that we support our people, and they've got long-term employment. But with the commodities business, we can't always achieve that sort of goal. Diversity, it's a large focus. We're doing a lot of things around diversity.
We want to increase both the female population and the Indigenous population into our business. That's a high priority for us. We've got about 22.3% of our population is female staff, and 3.7% is Indigenous out in the regions. We also have about 250 graduates, trainees, and apprentices in the business in 2024. That number has been incrementally growing. They're the future of this business.
They're the young people that are enthusiastic and learning trades and different skills, but very important to us. Women make up about a 1/3 of the entry-level programs that we run and around training and our graduates, and that includes machine operators.
So, we're getting more and more women out onto site. We're making sure that we've got the right facilities out there to cater to give them not just a nice area, but a safe area.
Wellbeing has been a big part of MinRes over the last six or seven years. We've really been leaders in that area and a focus. I mean, in terms of wellbeing, probably most people kind of forget now. We go through these turbulent times that we are, but back when COVID first broke out, we were the only company in Australia that were innovative enough to go out and secure the right high-quality test equipment.
We were testing over 60 mine and oil and gas companies in Western Australia, and we were a part of the solution working with the government to make sure the state stayed open and delivered all of the value they did through that period, so no mine shut down at WA. We were the powerhouse, and we were the cash box for Australia during that period, and MinRes played a big part in that.
So, wellbeing is really important. We did that to make sure that we could guarantee all our people a job through COVID, and they could pay their mortgages, and we achieved that. Another thing that we've done as a business that I'm really, really proud of.
M aking sure that our people are creating safe and supportive environments, is absolutely our main priority because we can't work if we don't know that they're working safe.
We can't go into production. We can't build anything. We identified about five years ago that mental health was as big an issue as safety or physical health. We brought on a great leader, a great psychologist, Chris Harris, brought him into the business, and we didn't realize how much we needed him in the business until he started. His services have become unbelievably valuable.
The uptake in that area has been strong, and you'd be horrified to know the number of people that need that sort of help. Not ongoing, some of them, but from time to time, we all need a little bit of reasoning, and we need to be tuned up.
Chris has now got a further eight psychologists in the business full-time. We've got seven of them on FIFO, so we're getting around all our sites, and we're making sure that our people are as safe as they can be.
We've got industry-leading facilities sitting in our head office, as many of you will know, and we've done that because we want to make sure that we've got a great collaborative team and working in a good environment. We're about to add a daycare center, so the daycare center will house 105 children, and the existing one can already house 20.
So, we're going to have 125 children that we have housed that our people can bring to work and have them nearby, and that is subsidized. Experience, we're investing in employee experience, industry-leading initiatives. MinRes Air, we've started that up recently. Why did we do that? Economics, it's money. It's the bottom line is the reason why we've done it.
We were losing 10,000-12,000 man-hours a month on people changeovers because we simply couldn't have any control over where the planes left Perth. Therefore, we can't control when they got to site. So, we were losing countless tonnes of mining and plant performance because in a lot of the cases, we had to shut them down, and that was a huge cost to the business.
That doesn't say anything for being able to get our people to and from site efficiently at the right time and reducing the turnover of our staff. So, a great outcome we've got from that. And again, we've got about 2,600 people in WA, and everyone knows that everyone in the mining industry is stretched for people.
We've expanded that now onto the East Coast, where we've got a pot of 24 million people sitting out there. So, we've got flights coming in and out of Brisbane directly on,to our mine site. So instead of one and a half days to get to a mine site in WA, if you live on the East Coast, you're now five hours, and you're a very comfortable five hours. So, that adds to their lifestyle. They were paying the cost of those fares.
It's now covered by MinRes, so we're the go-to people for that. So that's turned out well. Resort accommodation, I think you've spoke about that for a while now, 500 pods operational at Ken's Bore. Why did we do that? Because we want to give people a better experience on site.
We want to be the go-to place for people to come to. Mental health issues, it's a lot to do with sitting in a tiny little 12-square-meter donga with one window in it. What we offer is completely different to that. Equally as important, diversity. We want to bring a lot more women into the workforce, so we're offering couples accommodation, and it's working extremely well.
Supporting communities, really important. Communities both here in Perth and the regional areas and traditional landowners. We've got a proud history of supporting local business, industry, and communities. We're very strong in it.
FY2024 focus continued, AUD 3.8 billion spent in Australia, mainly in WA, on suppliers. AUD 8 million spent on about 125 charities. We've also awarded what I'm very passionate about around our traditional landowners. I mean, we have an obligation to make sure that our traditional landowners become partners in our mine. We're doing that rapidly.
We want to improve their standard of living, their housing, their education, their health, their wellbeing. We want to educate their kids through school and into uni. The goal is we want these kids running our mines in the future, running it in harmony with the way the land should be managed. That's a big focus.
We've got 16 Indigenous contracts worth AUD 96 million that we awarded in 2024. The Indigenous business spend during that year, and those contracts can go three, five out to ten years.
The Indigenous spend almost tripled to AUD 68 million for the year. Another thing that we're incredibly all proud of, we've got a great team right through the business. Every department of our business is incredibly supportive of making this work. So we're going to keep that, and we're going to try and increase that year in, year going forward. Our environmental responsibility.
We all know that Western Australia is without doubt probably the world's best and most ethical mining jurisdiction in the world. The standards we run in WA are second to none. The volume that we do here is large, but we've got a lot of incredibly high-quality people in WA running these mines.
We've got great working conditions and great environmental standards. MinRes continues to operate responsibly and sustainably. We're committed, of course, and we remain committed to net zero by 2050.
Our prime focus right at the moment is to try and simply reduce the diesel burn that we have. That's the prime focus. The reason for that is that's where we create most of our carbon emissions. If we can get that down, and we are doing that, right at the moment, the only tools available to do that with is we're using renewables. We've got wind and we've got sun that we're using very quickly, and we're also using gas.
Gas is not the long-term answer, but it's a transitional fuel. This year, we also launched a decarbonization fund to support our commitments. MinRes's operations charge for every tonne of emissions produced. Every time we're using diesel, gas, or electricity, we are charging that business unit an amount of money for each tonne of emissions they put in the atmosphere.
That covers all operational projects, and we can't obviously do it without our customers. We estimate that in the first year, we're going to generate around about AUD 20 million, and that AUD 20 million will continue to grow year on year. It's just the start.
The funds will be reinvested into green projects where we can continue to reduce the carbon emissions going into the atmosphere. So I'll just take a break for a second, ask Mark if he'd come up on stage and just talk you through some of the finances.
Thanks, Chris, and good morning. My name is Mark Wilson, and I'm proud to have been the CFO at MinRes for the last six years. As Chris referenced earlier, we recognize that the balance sheet of MinRes continues to be a focus of our shareholders. For a number of years, we've been investing in a great project we expect will generate significant cash flows for many years to come. We're now at the tail end of that spend.
At the same time as we've been investing, we've seen commodity prices falling considerably lower than where they were previously. It's important to note that some years ago, we set up our debt to be flexible and to protect us as far as possible. The interest rate on our U.S. debt is fixed. Our first debt in the U.S. matures in May 2027, almost two and a half years from now.
By that point, we expect Onslow to have fully ramped up and be operating for over two years. Our debt holders remain fully supportive of our business. We have been prudent as we've navigated this period of high investment spend and lower commodity prices, and by the end of December, we expect to have released about AUD 2.5 billion from asset sales and restructures into the business.
This includes a highly innovative sale of 49% of our interest in the Onslow Iron Haul Road, and we expect proceeds for that transaction to ultimately reach AUD 1.3 billion. In addition, we've taken steps to tighten our spend. As Chris said, we've lost some jobs through the business, and we've tightened our capital investment.
Moving forward, we see a clear path to deleveraging. Our second half performance will be significantly stronger than our first.
I do want to highlight that last month, for the first time, Onslow Iron operations generated a cash surplus for the business, and we expect that to be the first of many such months for years to come. In closing, I just want to emphasize that we have many options available to us to support the business and the growth opportunities in front of us. So, thank you.
Thanks, Mark. Okay, I'll pick up the pace a little bit. So, let me talk a little bit briefly on Onslow Iron. It's the largest and most innovative project that MinRes has ever delivered. We got it done in record time, as I said, and our expertise and the innovation has unlocked those stranded tons in the West Pilbara.
If we hadn't come along, I'd be willing to bet that it would probably never have been developed, which is a shame for employment opportunities in Australia. It's leading the transition in our low-cost, long-life operations. It's providing long-term annuity revenues to fund future growth for MinRes.
So we've got the iron ore we make a living out of, but we've also got the mining services and the infrastructure being important in the haul road. In May, we achieved first ore on ship, which was a milestone, a great achievement.
I think there was plenty of doubters out there. We were aiming for September originally, and we accelerated the project up until June, and our team didn't tell us it was going to happen, but they just loaded that first ship in May, which is amazing. 21 months after FID, 12 months after the construction commenced, and 10 months after the permit come through for the approval for us to start building that haul road.
So incredible what the guys have put together. It's driven by the company's DNA. It's that can-do attitude that I spoke about earlier that delivered Onslow Iron, harnesses in-house innovation that we've developed over three decades. So, we've got our crushing innovation. We've been able to put three 15- million- tonne- plants on the ground up there. We call them Next Gen 2 plants, I believe. They're quite innovative.
We can get that done for under AUD 250 million. If we were doing the normal fixed strategy, it would probably be about AUD 1.5 billion. That's the difference in the innovation. That's what makes this project affordable. Road trains, they're developed in-house. I mean, they're the largest road trains in the world. They haul 330 tonne with a single prime mover, and they are somewhere in the next period of time.
Mike won't tell me, but I'm hoping in the next three or four months, they're going to be autonomous. What does the autonomy do? It means that they operate exactly the same hour after hour. We take the human factor out of it, which means the safety is where we want it to be and operated by computers. They operate almost perfectly. Looking forward to that.
The transshippers are arguably the best transshippers in the world. They were designed in-house by MinRes, led by Jeff Weber. Amazing job that we've put together and incredibly proud of all of that combinations come together. It's the perfect business model, as I said earlier.
So the perfect business model for us is we go and find an ore body where juniors or companies are having trouble developing and we have a look at the value.
We take our innovation, our mining services, and we apply that and we can get that done and deliver benefits to our partners. So good outcome. Joint Venture partners sitting inside there, great partners. I mean, we're very fortunate to have them. Baowu from China, the largest steelmaker in the world, and they have told us that as the Simandou ore comes into China, this is the perfect blend for it.
The Onslow Iron ore will be blended with Simandou. POSCO, another one of the great companies out of Korea, and AMCI from the U.S., they're our partners. MinRes sits in their holding an effective interest of 60.3% of the iron ore. Again, we own the infrastructure and the mining equipment, sorry, the mining services equipment. 35 million tonne sitting in their crushing pit to port haulage, port operations, and transshipping.
That's all the mining services part of it. The Onslow Haul Road, we've found a great partner in Morgan Stanley, incredibly happy to have that team on board. They work with us. They understand the culture. It's a good find. All the major infrastructure at Onslow Iron is almost done and finished. We've got two of the big Next Gen crushing plants are running well. The third one is due to come online over the next 30 days.
Mine stackers and all the like are commissioned. The airport's fully operational. The 500 pods are occupied. We've got 150 km of the private haul road complete and operational. Service fleet of road trains continues to build, as does the transshippers, and the autonomous ramp-up phase is commencing in the coming months.
The port infrastructure, truck unloading, port handling, the shed, the bridge, the reclaimer, transshipper, loader operational and have achieved nameplate capacity, which is really important. They're all hitting the tonnes and beyond that we expected. We've got three transshippers hauling at the moment.
Transshipper number four comes around in end of January, and then in late April, we get transshipper number five. That's when we move into ramping up to the 35 million tonne run rate. Iron ore, not a lot to say about iron ore. We're shutting the Yilgarn hub. The central Pilbara continues on.
The ramp-up continues at Onslow Iron. Going to be fully funded going forward. When the balance sheet returns to a level we're comfortable with and beyond, we'll be thinking about what opportunities there are to expand both in the Pilbara and Onslow Iron.
Mining services, the core of our business, our heartbeat, it affects everything. It's present in every part of the business, every mine site that we operate on, every process plant, they're there. It's our competitive advantage. As I said, they've got innovative products and services that are not available to most others out there in the market.
They own pit to ship supply chains, in-house engineering, construction capability, and as I said earlier, it delivers that value that puts us in a unique position. It's a cash generator. The earnings are unaffected by commodity prices. They are just annuity earnings streams. They don't change a lot.
They've been growing at 10% to 15% to 20% depending on the year over the last 18 years or so, and that runway is still in front of us going forward. We're paid on tonnes, crushed, processed, or hauled. The rates are indexed annually. We have sliding scales, so they don't give us enough tonnes for the month, then the rate goes up per tonne, and our relationship with our external clients has never been stronger.
We're a performance-based organization, and we deliver real value to our clients. Lithium business. As I said, tough times, bit of an oversupply in the market. It's mainly Europe, and the U.S. have been much slower than anticipated on developing affordable cars. They're working on it. It's happening.
China has been incredibly innovative, and you can go and buy a great car with a Chinese brand, and you would send your kids to school on them. They're great cars, and they're incredibly affordable. So the Western world's yet to catch up. They're working vigorously on it. The easy way of getting carbon out of the atmosphere is get the combustion engine off the road.
I think it's recognized, and I think that target of getting at least halfway there by 2035 is the real goal. So we expect lithium to pick up over the next period of time. We're mothballing Bald Hill, as I said earlier, Mount Marion and Wodgina, and continue to operate, focus there on costs and improvements.
One of the improvements we're looking at quite closely with Ganfeng down at Mount Marion is we're looking at installing flotation down there.
It significantly reduces our unit costs if we put that in. The ore bodies change. In the early days, we could run it all through dense media cyclone, and we're getting great recoveries, and it was near surface. The mines changed. So, we're looking closely at that, improving recoveries. We've also got a couple of million tons down there that would react incredibly well to flotation, and it's all been mined and crushed and ground.
So, two million tonnes are incredibly low cost. So, we're highly favourable in making that work. Energy, last month we announced the deal with Hancock, which Mark spelled out in dollar terms. We've got eight remaining tenements sitting in the Perth Basin. We've got the whole of the Carnarvon Basin, so that's going to turn into a Joint Venture with Hancock, and we own our own drill rig. Why do we own that?
Because we own all of our own construction equipment, all our own mining equipment, and we've found over the last 30 years, if you own and control your own equipment, it's the most cost-effective. You can control the program, you can control your unit costs, and our team are doing an incredibly good job with that drill rig. It's drilling right now.
We're down about 3,600 meters, heading for about 4,500 meters, and Darren has assured me we're going to hit a huge amount of gas. Betting his house on it. So, we mentioned that the amount of money that Hancock are going to pay. They're a great partner. We're very happy to have Hancock coming on board. They were a major shareholder in MinRes going back probably, excuse me, 15 years ago.
We work with them on a lot of mining services projects up in the Pilbara, so incredibly happy. They're a great partner to have. So that sort of wraps up what we've done for the year, what we intend to do in the immediate future. Closing remarks, focused on the balance sheet. We don't take our eye off that.
Focused on reducing debt, getting Onslow, as I said, up and pulling costs out of the lithium and looking at any improvements we can make on that. We're making sure mines are ready when the market turns around, and we're going to continue to grow the Mining Services business as we always have it, 10% to 15% to 20% a year, depending on the opportunities.
Our largest growth by far has been this year. There's no question about that.
As I said, I mean, we took a giant leap to get an iron ore mine in the business. It's going to last a long, long time. So, it's a legacy I'm proud to leave behind. It's going to have an earnings stream for a long time out. It's been a huge achievement. The Mining Services will continue to grow. As I said, we're going to double them by the end of, sorry, by about mid-2026.
We're supported by a really diverse business model, long life, high-quality projects and contracts. There are other projects out there we're looking at at the moment. There's nothing to be seen on them over the next couple of years. It's sometimes three and four years lead time before we can actually get to a project. So we're looking at them closely. It's all backed by the great people that we've got in MinRes.
They continue to work incredibly hard, as I do. I turn up every day and make sure that we're delivering. My team are there every day and work incredibly long hours. So I want to thank our shareholders. We've had many shareholders around lately that come out and have supported the business, and I thank you all for that.
I understand, acknowledge. Some of them have got different voices at the moment. It is what it is. This is a great business. I started this thing 32 and a half years ago in the lounge of a rented house with AUD 10,600 in the bank. I'm incredibly proud of the team that I've assembled, the board that I have beside me, and what we've achieved in that period of time.
And I will make sure I've totally committed to make sure that all businesses start generally with a founder or a group of founders. This business will transition through to the next level of management, and this business will go on long down the track. So, look, thanks everyone and good morning.
Thank you very much, Chris. It's pleasing to see that the energy and passion for the business still remains. I can assure the people in the room and on the meeting that we did try to keep Chris to a brief presentation on the business, but we didn't quite get there. Thank you, Chris.
All right. Now we move to the formal business of the meeting. This is a general meeting of shareholders. I note that a quorum is present and take the notice of meeting as read.
Copies of the director's report and financial report have been provided to shareholders and have been made available via the ASX. Filming or recording of the meeting is not permitted, but please note this meeting is being filmed for webcasting purposes. Today's meeting is considered a Hybrid AGM as it is being held in person and online via the Computershare virtual platform.
This allows shareholders, proxies, and guests to attend the meeting in person or virtually by webcast. In addition, shareholders and proxies can submit votes and ask questions in the room and online. The company secretary has advised that we'll receive questions relating to the resolutions from shareholders prior to the meeting, and these will be addressed shortly under the relevant items of business.
Voting on all items of business today will be conducted by way of a poll. Like last year, all voting will be completed online.
To provide you with enough time to vote, I will shortly open voting for all resolutions. Voting shareholders who have joined us in person should have received a white attendance card at registration. Should look something like this. If you did not receive a white attendance card and believe you should have, please raise your hand now, and a Computershare representative will assist you.
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I now declare voting open on all items of business. If you are voting online, the voting icon will soon appear. Please submit your votes at any time. I intend to vote any proxies left to my discretion as the Chair of the meeting in favor of each resolution. Shareholders are welcome to ask questions or make comments during the meeting.
If you are in the room, you can do so by raising your white attendance card and making your way to one of the floor microphones, which I think are obvious in the aisles. Please wait to be introduced, and anyone in attendance who requires assistance moving to the microphone, please let us know.
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To submit a written question online, select the Q&A icon at the top of the Computershare virtual platform, type your question into the text box, select the topic to which your question relates, then select send.
To submit a verbal question or comment, please follow the instructions written below the broadcast. Please note, although you can submit questions and comments at any time, I will not address them until a relevant item of business to which they relate. Your questions may be moderated, or if we receive multiple questions on one topic, they may be grouped together.
We may not be able to respond to all your questions and comments, but shareholders as a whole will have a reasonable opportunity to ask questions and make comments. I will now move to the items of business. As a reminder, this is a meeting of Mineral Resources shareholders. Only shareholders, their appointed proxies, or corporate representatives are entitled to make comments, ask questions, or vote.
All other attendees are very welcome as observers.
We will leave the polling open while we discuss the resolutions, and we'll provide you with a warning before we close voting. The first item of business relates to the financial statements and reports for our 2024 financial year. This item of business does not require shareholder approval. However, shareholders have an opportunity to ask questions about the reports, management of the company, and operational matters.
Our auditor, Ernst & Young, is represented today by Darren Lewsen and Philip Teale. Down the front, thank you. We're available to answer questions in relation to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by the company in relation to the preparation of the financial statements, and the auditor's independence in relation to the conduct of the audit.
Our 2024 annual report includes the director's report, the financial report, and the auditor's report that was lodged on the ASX and mailed to shareholders who requested it. These reports are also available on our website. I now lay these reports before the meeting and invite questions and comments. As I said earlier, several questions were received in advance of the meeting.
Several of these have been addressed in my earlier remarks. However, there remains other questions which I'll now ask our General Manager, Investor Relations, Chris Chong, to read. We'll then move to questions in the room, and there can be a short delay in receiving questions from online attendees. Chris, can you read out the first pre-submitted question relating to this item of business, please?
There were two questions received on how the director satisfied themselves, that transactions between the company and entities associated with family members of the Managing Director are arm's length and fair.
Thank you, Chris. The board acknowledges that the historical processes in place to manage related party transactions were not as robust as they could have been. Over the past two years, the board has worked to significantly improve the controls on related party transactions.
As mentioned earlier, all transactions involving key management personnel and their related parties are now under review by the Ethics and Governance Committee, including Ship Agency Services, a shipping agency owned by Chris's daughter, and Resource Development Group, 64% owned by MinRes, and whose Managing Director is Chris's brother.
Going forward, related party arrangements are being reviewed by the EGC, and the board has resolved MinRes will take steps to exit or unwind existing or remaining arrangements that no longer have compelling commercial benefit for the company.
Thank you. Chris, n ext ques tion.
Several questions were received relating to Chris Ellison continuing as Managing Director for 12 to 18 months given the investigation's findings.
It's the board's duty to protect shareholder value. A sudden departure was not considered in the best interest of the company. As I mentioned, this was an incredibly difficult decision for the board, and we've sought to strike a balance by announcing an orderly leadership transition. The first step is to find a new Chair within the next 12 months, and this process commenced, led by Zimi Meka as new Chair of the Nominations Committee.
The new Chair will be involved in the appointment of the next Managing Director, and it is for this reason for the next 12-18 mos. timeframe that we're planning.
Thank you, Chris. Next.
Does Chris Ellison view the company shareholders as investment partners, and does he propose to compensate or reimburse shareholders for personal profit they obtained at shareholders' expense?
Where Chris used company resources for personal matters, there were processes in place, and those costs were repaid to the company in a timely manner.
With respect to the pre-IPO transactions that straddled the IPO of AUD 3.8 million as set out on our 4th of November announcement and the subsequent personal tax matters, the board imposed a range of financial sanctions on Chris, totaling up to AUD 18.4 million. The board is satisfied that this is an appropriate response.
Chris has fully accepted the board's decision as MinRes's largest shareholder. He is fully aligned with shareholders, wants to deliver on his commitments, and ensure that continues its success long term. Chris.
Why was a board member's personal tax liability included in the financials of MinRes?
As disclosed to the ASX on the 4th of November, Chris's personal tax liability was never part of MinRes's financials. Chris self-reported to the ATO and subsequently reached a settlement with the ATO that required him to pay additional taxes, interest, and penalties.
Chris, not the company, paid these amounts. MinRes and its subsidiaries made two payments to Far East Equipment Holdings in 2006 and 2008 to extinguish a pre-existing liability relating to pre-IPO equipment purchases. The ATO has not issued any amended assessments to MinRes with respect to depreciation claims made on the assets acquired from Far East.
Chris, any more?
There is.
How will the board deal with the latest scandal causing loss of value and confidence in our stock?
We recognize the impact on shareholders for the matters we've seen over the last few months for which we're, the board, are sorry. While challenging now, we see this as an important inflection point for us to restore trust. Everyone is committed to best practice governance, which will result in a stronger MinRes.
Our priority is an orderly leadership transition starting with my replacement in 2025, and the subsequent Chair will then lead the recruitment of a new Managing Director.
We've established the Ethics and Governance Committee comprising of three independent directors and supported by internal and external advisors. As I stated earlier, we're reviewing transactions involving key management personnel and their related parties and enhancing internal controls regarding related party transactions.
The board has resolved MinRes will take steps to exit or unwind existing arrangements that no longer have a compelling commercial benefit for the company.
Why will the board not use a non-aligned third party to investigate the recent news about tax implications? As the board should not be conducting investigations themselves.
As disclosed to the ASX on the 4th of November, the board has been engaged for two and a half years with independent third party experts to assist with the investigation, including Herbert Smith Freehills and McGrathNicol. While expert input is warranted, it is equally important the board is across all matters so that we can discharge our duties to shareholders. The Ethics and Governance Committee is also supported by external and internal advisors.
Questions were received on whether the Chair and the board will be resigning their positions or deferring the director's fees to acknowledge their accountability.
I, along with my fellow directors, take full accountability for the governance matters. I've already announced that I'll retire from the board in 2025 to allow a new Chair to lead the leadership transition. As you heard from Denise and Jacqui, the rest of the board is fully committed to strengthening governance to the highest standards to restore investor confidence.
Many of the directors have only recently joined the board, and they will be an important part of the company's renewal process. I'm very grateful to the commitment of the board for addressing these matters.
I also want to highlight the company's success this year, including delivery of iron, Onslow Iron ahead of schedule, and so to keep in perspective that there's a lot of positive things that are occurring within the business.
Can you outline the committed and foreshadowed drilling program in all permitted oil and gas exploration or production areas it operates? Can you disclose the financial and other merits of using equipment that is owned and operated by MinRes in this and future operations versus engaging a drilling contractor that also services other clients in similar activities?
As announced to the ASX on the 31st of October, we reached a AUD 1.1 billion agreement with Hancock that accelerates value creation from our Tier 1 assets and maximizes the value of our exploration success for our shareholders. We are working with our joint venture partners to confirm work plans going forward, including the drill program.
This will not be finalized until after the transaction is complete. The MinRes Explorer provides significant cost savings for each well drilled, depending on the depth and technical complexity of each well.
One of the main benefits of owning the rig is to control the sequence and programming of wells, allowing longer-term planning and certainty.
Is there a focus from the board on the level of debt on the balance sheet, and what is the view with management to act on this in the near term?
As our CFO, Mark Wilson, has previously spoken to, we recognize that the group's balance sheet remains a focus of attention. We always knew that our net debt position would be at its highest at the end of the calendar year following the Onslow Iron investment and development. Construction spend at Onslow Iron is now reducing, and the project was operating cash flow positive in the month of October.
As Onslow Iron ramps up, the balance sheet will deleverage quickly, quickly back towards the group's stated targets, which was always our plan.
The balance sheet is robust with strong liquidity, and I want to highlight that we've recycled over AUD 2.5 billion in capital back into the business in the last 12 months. Our relationships with banks and bondholders remain strong. We continue to monitor our balance sheet position, having regards to the group's potential growth opportunities and the prevailing commodity price environment.
Considering the recent allegations against Chris Ellison and the resultant share price performance, is a dividend going to be paid in March 2025?
Dividends will be decided at the half-year results in February.
That's the end of the pre-submitted questions, Chair.
Okay, thank you, Chris. Are there any questions from the floor on this item of business? If you just move to the microphone, please, if you've got a question.
Mr. Chair, it's concerned me that the governance issue has become known to shareholders through the media rather than as a board announcement, considering the board has been looking at this matter for over two years. Can you give an explanation as to why shareholders have not been earlier advised and potentially share value reduction reduced?
Thank you for the question. As we've explained, investigations have evolved over time to deal with allegations in the media and from other sources. We've had processes in place to disclose material information if and when it comes to light. Recent media reports occurred while we were still considering a number of matters. The reporting did not necessarily align with our understanding of these matters. Yes.
Chairman, John Campbell, I'm representing Australian Shareholders. I think 146 shareholders and about 180,000 shares, proxies.
We too would express the same disappointment as the last speaker that the advice to shareholders came so late in the piece. I'd ask whether you were aware of, well, you've told the exchange that you were aware of the transactions or allegations about them as early as June 2022.
I'd ask why you didn't tell shareholders at that time about it and whether you told the auditors either at June 2022 in their audit then or June 2023 or June 2024.
Okay, thank you. As outlined in our statement to the ASX, the company was informed in June 2022 of allegations of payments to offshore entities connected with Chris. We received more detailed allegations in June 2023 and substantive details in November 2023. The board received a briefing on these matters as a progress report in June 2024.
We were not in a position to disclose information because I was subject to ongoing inquiries prior to us announcing on the ASX on the 4th of November.
Can I ask then the auditors if they were aware of these allegations in either of those three audits that they did?
Happy to throw it over to EY.
Thank you.
Good morning, Mr. Campbell. Thank you for your question and thanks as always for your interest in the audit process. Just at the outset, I'd like to point out that under the Corporations law, I'll respond to questions today regarding the conduct of the audit, the content of the audit report, the accounting policies adopted by the company, and the independence of EY.
I won't today comment specifically on any client matters that are not already the subject of disclosure in the financial report or described in our audit report.
As you'd expect, we work very closely with the company, with management and the board of directors, including the audit and risk committee Chair. We have access to all books and records through our audit and through the completion of our procedures. We work very closely with them, not only up to the point of signing our audit opinion, but subsequently as these matters have arisen, and we'll continue to work very closely with the company.
Chairman, through you, I'd point out to the auditor that he is responsible in the audit report for reviewing the information in the financial statements and determining whether it's consistent with his knowledge of the affairs of the company going through the audit and that we'd had a duty to report any material inconsistency with that knowledge to the shareholders, which he hasn't done in either of those three years.
Can I ask again if he was aware of it and why didn't he report it if he was?
Look, I think he's answered the question. I think we put out disclosure at an appropriate time once we had the facts available to us, and I think you mentioned materiality as being important in terms of that determination.
I do, but he hasn't answered the question. He hasn't answered whether he was aware of it, and you haven't, with respect, Chairman, either. Answer whether you were made aware of it.
I think in our announcement that we provided to the marketplace in relation to disclosures, when we became aware of facts and then subsequent information that allowed us to continue our inquiries. We will not put out information to the marketplace unless we understand the facts around what we're actually disclosing.
I guess I'm not going to get a better answer. Is that the case? Because, I mean, it is important to me that we understand why who knew what and when and why it wasn't disclosed earlier because it's cost shareholders, and Mr. Ellison is a major shareholder, probably the most of all.
I think in total over AUD 1 billion in loss of shareholder value, and it might have been less if it had been disclosed earlier and what you were doing about it earlier. I think maybe it's the shock factor that's caused the problem.
Yeah. Look, I think I've answered to the extent that we're prepared to. We'll put information in line with our continuous disclosure obligations into the market when we actually have the facts and some view on the materiality of the information that needs to be provided.
A follow-up question then is, why did the board fail to take action earlier to deal with the related party transactions and to make the steps that you're now taking?
I think the board has taken actions in the past in relation to related party matters. The company is allowed to have related party transactions as long as they're commercially beneficial, they're arm's length, and they're at market rates.
We've evaluated a number of these related party matters at times and determined that. I think we have committed to sort of continuing to review to make sure that they offer compelling benefits to the company.
Thank you.
If you move to the microphone, that'd be appreciated.
Mr. Chairman and board members, good afternoon. My name is Vernon Parrott. I'm a shareholder. You might be pleased to know my question is not about disclosure. It's about our oil and energy assets.
About two years ago, Mineral Resources made a takeover bid for Norwest Energy, and the final bid was accepted or recommended by their directors, which put a value on their assets of about AUD 500 million worth of Mineral Resources shares. Their major asset was a 20% holding in our oil and gas assets.
According to my reckoning, that would give that project a value of somewhere between AUD 2 billion and AUD 2.5 billion. My question is, are our finances now in such poor condition that we've just sold not only those assets but some others for a little over AUD 1 billion to Gina Rinehart?
I may have to take this on notice going back to the historical transactions.
The decision to sell the gas assets was done on the basis of external advice provided to us around the value of the assets and the opportunities that were presented to us over a period of time. I think the sale, as Chris has highlighted, was of two tenements, not our entire gas portfolio.
I think the decision was made on the basis that the returns to shareholders were greater through the sale and the value offered than self-developing those assets in our own right.
Thank you.
Yes, please. Yep. If you don't mind taking the microphone.
Again, on your announcement on the 4th of November, there were several conditional clauses. One of them was related transactions, not of material size. Could you define further what that means?
Materiality in an auditing sense relates to sort of financial matters.
Again, I'm happy to sort of defer to sort of Mark, our CFO, to sort of maybe give some context of materiality. But you've got to understand we're a company with a market capitalization in the billions, revenues in the billions, and EBITDA in the billions. So small transactions that do not have a material financial impact on sort of our balance sheet or our financial statements are not required to be disclosed.
Thank you. But it doesn't help me understand what materiality means in this case.
It's relative to the financial size of the company.
Thank you.
Thank you. Yep. I'll continue if there's further. Any additional questions? Yes.
Allan Dixon, a shareholder, also a member of the Australian Shareholders' Association.
Are you expecting a class action against the company for all those people who bought shares at the higher price and now have lost up to AUD 1 million?
We've not been served with a class action, Allan. Yes, please.
Would you please elaborate on the independence of the governance committees that have been set up, please?
So a board is comprised of directors. The vast majority in this case are non-executive independent directors. The establishment of the Independent Ethics and Governance Committee and the scope of the committee was outlined to the ASX on the 4th of November.
We've previously said some inquiries remain ongoing and will continue to do so. But the committee acts with the support of internal and external advisors around matters. And with that, and plus the independence of the individual directors, it has complete independence in its deliberations. Chris, do we have anything online?
Yes, Chair. There is an online written question. The first one is from Stephen Mayne. A question for one of our two Perth-based Ernst & Young audit signing partners, Darren Lewsen and Philip Teale. As part of their process auditing the 2024-2025 accounts, did the EY team establish that the full amount of related party benefits obtained by CEO Chris Ellison has been repaid to the company?
If not, how much is outstanding and how is the question of interest on the outstanding sums being accounted for? Did Mr. Ellison fully cooperate with the audit team on the question of unravelling and making good on these past related party transaction benefits drawn by him?
Look, I'll make an initial statement here and then pass over.
I think we've stated many times, including in earlier statements in this meeting, where Chris used personal resources of the company, those things were repaid in a timely manner. In related party transactions, where there were real related party transactions, those matters have been investigated, reviewed, and reported or disclosed to the market where appropriate.
A nd we expect that going forward we'll continue to do independent evaluation of related party matters with the benefit of the Ethics and Governance Committee supported by external valuations and advisors, and if they still provide compelling opportunities for the business, then we'll disclose those as required. I don't know if EY has any further thoughts on this matter.
Thank you. Thank you, Chair, and thank you, Mr. Mayne, for your question. I think there were three aspects to the question. There was a reference to the 2024-2025 financial statements.
They have not been issued or reported on. There was a question about the repayments by Mr. Ellison of any related party transactions. As said before, I won't comment on specific matters that are not already described. But the third component was in relation to cooperation.
We're comfortable that through the conduct of our audit, we had full cooperation from management, the board of directors, and the company as a whole. And we stand by our opinion on the June 2024 financial statements. Thank you.
Thank you. Chris.
The next one is from Richard Dunn and Mrs. Marion Dunn. On what basis did the board consider that potential reputational damage that the company could suffer if matters were disclosed would not be price-sensitive?
As we've said to the ASX, the board considered the materiality of the matters regarding Chris's private tax obligations and MinRes dealing with entities associated with Chris. Our view, taking into account the facts that were within our knowledge, was that these matters were not material on the basis that Chris's dealings with the ATO related to his personal tax obligations.
Sorry, Chris's dealings with the ATO were on his personal tax obligations, and these matters were resolved. The board did recognize that its subsequent decisions around Chris were materially price-sensitive and made prompt and fulsome disclosure of these in its 4th of November announcement.
The next online question is from Noel Johnson, Superannuation Fund.
Why has the board reduced future Mineral Resources profits by, one, selling out gas fields too cheaply, and two, removing a CEO whose results are a hard-to-match 16% plus return on invested capital over the last four years and who has 11% shareholding and a vested interest in the company's future on ESG grounds?
On point one, the gas fields were to potentially provide cheap energy for our mines, our machinery fleets, produce methanol and ammonia, and export gas overseas until 2030. Our future fuel costs must now increase.
On point two, Chris Ellison is invaluable to Mineral Resources. Why not move him sideways as was done at WiseTech ? Ellison must repay any monies owed due to poor judgment, but most of his judgments have been extremely profitable to the Mineral Resources for many years.
I have noticed some funds espousing their ESG credentials while producing mediocre returns for their members or not paying timely benefits to their members.
Okay. Just remind me, Chris, that I cover off relevant points here. I've already spoken to the oil and gas assets. I think MinRes's strategy has always been one where it considers its entire portfolio, again, with the benefit of third-party independent advice around these matters, considers the best options available for it in terms of delivering on assets within that portfolio.
There's been, and again, I think it's one of the beauties of MinRes that it is constantly able to assess what's in its best interest at any point in time.
I think we felt that the development option, which would require substantial CapEx expenditure on the oil and gas to sort of monetize future value, was something that, given the circumstances in terms of our current balance sheet, was not appropriate for us to sort of execute in the near term. And we received great value supported by advice from third parties around the sale of those assets. Second part of that question.
Why not move Chris sideways as opposed to WiseTech?
Look, I'll make some comments here. Since I became Chair, I've had very explicit discussions with Chris over the last two and a half years around succession planning. Again, with support from Spencer Stuart, the company has been working quite diligently, as has Chris, around sort of how that might proceed over a period of time.
It is clear that Chris is a founder of the business and adds enormous value. I think the plan originally was no set timeline, but to be organized. We accept as a Board that the key risk around this business is Chris's role in the business in terms of creating value. It's never easy for a Founder to plan and sort of think about sort of the future.
But I've got to compliment Chris on the fact that he was heavily engaged in this process with us over the last two and a half years. I think recent circumstances have meant we've accelerated those outcomes. But it's in the best interest of shareholders that it be done in an orderly manner.
The next question is from Brett Leopold of Leopold Super.
In relation to the Kali Metals transactions before and after the IPO, please provide some color and details on Chris's actions and those of his wife, mother-in-law, and management team, and your position on whether this was in line with Chris and the team's duties to MinRes.
So, on the Kali transaction, very quickly, what I can comment on is the actions taken by the board post being aware of the transaction in relation to sort of management of the company and their involvement. Again, the commitment was made by management to, and again, I won't go into, well, I don't plan to go into detail around the background, but Kali was a strategic asset of interest to the company.
The company had an intent to sort of, acquire a position to support its position in terms of acquiring assets around its existing infrastructure.
We recognized once we became aware of it that it was not going to pass the pub test. We instigated controls. We put blackouts around the management transacting in their shares for an extended period of time. We allowed MinRes to sort of continue to acquire the position that it went or desired to sort of accumulate for its strategic purposes.
MinRes did not transact with any of the management in relation to those shares. In relation to actions taken by non-MinRes management, that's not for me to comment.
The next question is from Mr. Richard and Marion Dunn. Was the CEO present at the meetings where the discussions took place as to whether the issues currently in the media were price-sensitive or not? Which discussions resulted in non-disclosure timelessly?
Our corporate governance practices at some time mean that when we're talking about matters that deal with Chris, we go in camera and Chris is not present in the meetings.
The next written question is from Mr. Quock Ing. What was the materiality used for the past three years' financials? And what were the audit procedures on related party transactions?
I think I've already spoken to materiality there. So clearly, the materiality thresholds from a financial perspective are far in excess of the values of the transaction we've spoken about. And Chris, remind me of the second matter again, please.
I think you've answered the question.
Okay. Thank you, Chris.
The next written question is from Mr. Sue Smith-Shah. Had the media not shed light on the various related party transactions and governance problems generally, wo uld the board have done so on its own?
In any case, why didn't the non-associated members of the board take action after all these years?
I think we've spoken a number of related party transactions such as the Kwinana properties, which are strategically and operationally vital for our businesses, have been disclosed in every annual report since the IPO in 2006. As other matters came to our attention and were real related party matters, the disclosure on those was made, and we've continued to improve the level of disclosure over the last few years subsequently.
The next written question is from Daniel and Sophie Martinovich for Chris Ellison. What innovative solutions are being explored to drive growth and improvement? And can you share success stories or milestones achieved under your leadership?
I think we've already had substantial presentation on sort of the performance of the business here over the last 12 months.
I think in terms of looking at the board and the composition of the board and the sort of development there, I think it speaks for itself in terms of the evolution of the board composition and the recruitment of new directors that can sort of have a positive impact on the business.
The next question is from Stephen Mayne. The board concluded that Mr. Ellison, on occasions, used company resources for his personal benefit. This included directing employees to work on his boat and properties, directing an employee to manage his personal finances, and using the company to procure goods and services for his private use. The board has stated that whether the CEO has used the company to procure goods and services, procedures existed to ensure that we got paid.
In all seriousness, were these so-called procedures ever properly applied? If so, why did Mr. Ellison's daughter backpay more than 10 years of rent only in 2022? How much has been repaid in total, and when were these payments made? Also, has the CEO repaid Mineral Resources for the portion of Yenna Ong's salary for the time she spent working on his personal affairs? If not, why not? Will the board undertake to investigate this particular related party transaction?
Thanks for the question. As disclosed to the ASX, the board has satisfied itself that the procedures existed for repayment by Chris where he was using company resources on personal matters. In regards to the rent relief provided to SAS and Propel, this matter was not identified by the current board until FY2023, at which point steps were taken to bring it to an end and seek appropriate repayment for the rent relief provided.
Finally, as I've mentioned during my address, all related party transactions involving key management personnel and their related parties will be subject to further review by the Ethics and Governance Committee.
The next question is from Mr. Simon Hay. Over the past months, the company has been subject to significant short-selling due to speculation on weakness of the balance sheet and hence the likelihood of a capital raising being required. Based on stress testing of the balance sheet, how likely is a capital raising to repair the balance sheet?
I think you heard earlier on in the meeting from Mark Wilson, the CFO, about the state of our balance sheet and our position. We continue to retain a number of alternatives to fund the business going forward, and we've demonstrated over the past 12 months that we can adapt to address changing circumstances.
The next question is from Miss Bettina Fischer and Miss Margaret Ewing. Is it really necessary that Chris Ellison vacate his position for a self-disclosed matter, noting his personal contribution to making Mineral Resources the company it is today is unquestionable?
Again, I think we've addressed this matter in some detail in terms of our response on the 4th of November and sort of discussions today and statements. Talking earlier about sort of succession, it's something that has to happen at some point in time. I think the desire is to do it as in an ordinary manner as possible.
Chris, as a large shareholder, remains fully committed to the company and the success of the business going forward over the long term.
The next question is from Mr. Anthony Gray.
Is it possible for the revenue received from the financial penalties placed on Min's CEO be quarantined for a special dividend for Min's shareholders?
So if you look at the financial penalties, it had several components. One was foregoing of potential future earnings associated with LTI and STI. Second component was a reimbursement of costs associated with Far East Equipment Holdings for an amount of approximately AUD 3.8 million. There was also a commitment to a charitable donation. So, I think we've covered off sort of how the use of proceeds will occur there.
The next question is from Mr. Peter Caillard. Does Chris now regret potting shareholders and analysts at the 2023 AGM for questioning the amount of debt on the balance sheet?
I think we've spoken about the debt position in detail.
I think the board's been well aware of the phase that the company's going through with a high CapEx spend to achieve a great outcome on a project. The board consistently monthly meetings reviews both our liquidity and debt profile, the structure of our debt profile. I think Mark answered very adequately this morning sort of our understanding of where our financial positions are.
The next question is from James and Jane Dingwall. Could you help the meeting by putting into context, ideally in percentage terms, the amount which Mr. Ellison has personally gained through these recently disclosed improper dealings relative to the total shareholder value Min has created over, say, the last decade?
No, I don't think it's possible for me to do the mental arithmetic on that. I think as we've stated in relation to sort of use of company resources, Chris has repaid.
I think in relation to related party matters, again, there was disclosure on the 4th of November around those matters.
The next question is from Brian Frederick of Blue Mountain Super Assets. Good morning. I'm a private shareholder and a company director who, through various nominees, own 1,295 Min shares. Whatever happened a long time ago before Min IPOed, I'm not interested in.
Chris has realized the error of his ways a long time ago. He made amends to the ATO, the board is aware and followed up, and now there is additional scrutiny and tightening of protocols under the review of the Governance Committee. A s a shareholder, I would like Min to get on with its core business. I fully support Chris Ellison and know many other shareholders who do. Many of us don't want him to leave in 18 months.
We are confident in the business direction he is taking with Min. He built the company and needs his continued vision for at least two years. The continued historical navel gazing by AFR and others has only diminished shareholder value for things that happened a long time ago, things that have been atoned for.
Min's got a bright future, so I would encourage the board to get on with the core business of mining and building shareholder value. I, for one, would support Chris continuing in the role after 18 months on the proviso board set KPIs are achieved.
How about it, board? Can the shareholders vote on Chris's ongoing role at the next AGM rather than the board making a unilateral decision? We, the shareholders, own this company. Chris is the one who led its creation. I think he deserves another chance.
Sorry, I just need to answer that question, I believe, first. Acknowledging the sort of comments, thank you very much. Again, I think we've outlined the plan as we articulated on the 4th of November. I think it's for the future board. Once the Chair's been replaced and there's a new Chair in the seat, the board will sort of clearly consider.
But I think we've articulated quite clearly, and Chris is fully supportive of an orderly transition here over a period of time.
Mr. Chairman, David Bowden's my name, and I'm a shareholder. I have a comment rather than a question. Is it appropriate to make it now or later?
Please, please. Okay.
My name's David Bowden. I'm a shareholder since the company listing. I'm a mum-and-dad shareholder. Investment in MRL has yielded none other than impeccable financial performance and remuneration to shareholders continuously since 2007.
This should not be forgotten under the stewardship of the board and the Managing Director. The company has achieved many other significant, important milestones, providing a culture that delivers on time to budget, proactive to globally changing circumstances, a very safe workplace, established carbon reduction programs and sustainability, a leader in female participation and leadership, a leader in cultural heritage.
As a shareholder, I am proud of all of these achievements. Of course, none of this can be achieved without strong leadership from the top. It saddens me that the media have conducted their own trial by media and that there is a general desire to bash a tall poppy. This has unnecessarily diminished shareholder value.
I had the option to sell out when they're AUD 80. I haven't sold a share. I don't intend to. Some mistakes have been made by the Managing Director.
They have been publicly admitted, acknowledged, and with remorse. Financial errors have been corrected, and significant sanctions and penalties have been imposed and paid. As a shareholder, I was surprised to learn of the board's decision to accelerate the succession of the Managing Director. If it's absolutely necessary, and personally, I'm not in favor, the timeline must be driven by finding a suitable replacement, not by some arbitrary time limit.
In any case, there should be a role for Mr. Ellison's continued service to the company to ensure its ongoing success. As current shareholders, let us celebrate the success of this entity under the guidance of the board and its Managing Director and every contributing employee to the company. Well done. Thank you.
Again, thank you very much for the comments.
I think just noting that we've had substantial shareholder engagement over the last three or four weeks, and clearly, there's a diversity of views from shareholders, and we've had to take that into account in terms of arriving at what was a very difficult decision in complex circumstances. But thank you for the comments.
Chris, do we have anything more online or?
We do. The next question is from Mr. Stephen Mayne. It is a credit to Chris Ellison that he hasn't sold large licks of MinRes shares during the 19 years. It has been a listed company with a founder in charge as CEO. His 22.58 million MinRes shares represent 11.5% of all stock and are currently worth AUD 769 million based on the current share price of AUD 34.05.
Given the lack of major sell-downs, I'm a little puzzled by the apparent size of Mr. Ellison's external wealth and assets.
The likes of Frank Lowy and Rupert Murdoch have answered this question in the past, so there is precedent for asking it. Given the current circumstances we're all in as minority shareholders in the complex public and private empire that Chris has built, could Chris please clarify whether his shareholding in MinRes is leveraged or pledged to external financiers in order to fund his extensive assets outside of MinRes?
Does he have the financial strength to avoid having to sell down his MinRes shareholding during this period of financial pressure on MinRes directly with our AUD 4.5 billion of debt and in his private empire?
No, look, Chris, I just don't think it's an appropriate question for a meeting like this. Certainly not for me to comment on Chris's personal financial position.
In relation to sort of the affairs of the company, I think we've already heard around our balance sheet and our position in relation to sort of net- debt, future opportunities, and sort of liquidity. So I don't think that it's relevant in terms of Chris's personal financial situation in terms of the performance of the business.
The next question is from Mr. Stephen Mayne again. On related party transactions with the CEO, the Chair today told shareholders and the wider market that MinRes will take steps to exit or unwind existing arrangements that no longer have a compelling commercial benefit for the company.
For example, as the Chair said, MinRes leases commercial properties from a consortium led by Mr. Ellison and has done since listing in 2006.
These properties are indeed strategically and operationally important to MinRes, and it is good to hear that the MinRes leases are at arm's length and on commercial terms. Nevertheless, you say that given the feedback from investors around minimizing potential conflicts of interest, Chris is offering the properties for sale on market.
As a member of the recently established Ethics Committee, could Jacqui McGill provide her perspective on why the board agreed to a 10-year lease for these properties just before they were put on market? Does the Chair believe this was appropriate? Did we know Chris and his fellow investors would try to sell these properties so soon after we signed up for these 10-year leases?
Look, I'll take that one. It's a governance-related matter, and I think we've already spoken to it. We've utilized those assets both operationally and since 2006. They're critical assets for the business.
Over the years, the board's been down there, visited the sites, and understands the significance of those assets to our business and our performance. I think there's been many situations over the last few years where we've looked to resolve and take control of those assets.
I think we started a process many months ago, well before the media sort of speculated around ways to sort of depart or separate or deal with related party matters in relation to these assets. We undertook comprehensive valuation. We understand they're important.
We want certainty around access to those assets, hence signing a 10-year lease. But they were done at sort of, market rate with third-party support in terms of the values that we're paying for tho se leases.
The next question is from Mr. Peter Caillard. What does this current board make of the behavior of previous board members for allowing Mr. Ellison to get away with what he did?
No, I can't comment on the behavior of previous board members.
The next question is from Stephen Mayne again. A general question on Mr. Ellison's mistakes. The CEO said the following in an ASX announcement approved by the board. I acknowledge that I made mistakes, some of which were driven by my wish to keep private sort of events. That caused me great personal embarrassment. Mr. Ellison, what were the specific mistakes you referred to in the ASX announcement?
And can you share your reflections on what motivated you to make the other mistakes, the ones which weren't motivated by hiding personal embarrassment? Were any of your mistakes motivated by a desire for personal enrichment, even if it happened at the expense of the other 65,000 shareholders in our public company?
Also, further on the issue of mistakes, the CEO did not disclose to the board the circumstances around his long-standing disputes with the tax office until November 2023. Why the delayed internal disclosure and how big a mistake was this?
Again, look, I think we've spoken to this matter several times already. Chris's statement was in relation to the matter with the ATO. He recognized it and has acknowledged that that was a mistake that he had made personally, and he regrets it. I don't think there's any further color required around that.
There are no more line-written questions, Chair.
Okay, thank you. All right. Given that there does not appear to be any further questions. Oh, apologies. Sorry.
Thank you, Chairman. My name's Jan Ford.
I spent a lot of time in Port Hedland, and I was particularly taken today with Chris's statement that 32 years ago, he sat in a rented property with AUD 10,600 and a dream. Today, I stand here to thank you, Chris, for taking that AUD 10,600, that dream.
I don't know what you did with the rented property, but thank you for showing me how, as an entrepreneur and a West Australian nowadays miner, you could show me how there was a win-win situation for people who owned property, who lived in unmining towns, people who had to breathe in all the chemicals from that.
And you showed me how we could make a better world. It could be safer, and everybody would win. Today, we've seen those shares go up and down. A lot of us have benefited because we backed you, and thank you for that.
We've taken a hiccup. We've taken a seesaw ride. That's West Australia. That's the share prices, and that's entrepreneurship.
We've heard that today you've had to face some indiscretions that you have had knowingly or unknowingly, and thank you to the board for supporting all of those issues that needed to be dealt with and for giving shareholders the ample opportunity to air their grievances, their concerns, and their disappointment.
But my question now is, I hope we can all move on, go back to those presentations you showed us, how you have the ability to take AUD 10,600 32 years ago and turn it into this amazing company and hope that with Hancock as a major investor, with gas fields, with energy, and with the greening of our world, you are the right person to take us forward with whatever that takes.
Thank you for giving me this opportunity to speak and to be here and to speak freely in this country. Thank you.
Thank you. Okay. I think we've had now a substantial opportunity for questions and comments, so we're going to proceed. The first resolution today is the adoption of the remuneration report. The details of the proxy votes cast on Resolution 1 are now displayed on the screen. We acknowledge that a number of shareholders have voted against our remuneration report and that, as a result, we will receive a first strike on our 2024 report.
The outcome is obviously a disappointing one for the board, and we understand there are a variety of factors that have influenced the voting decisions of shareholders. We'll continue to proactively engage with all of our stakeholders for their views on the business, including our remuneration framework and approach.
We'll now take questions or comments on this item. I'm not seeing, oh, yep.
Chairman, I'll be brief because I think we've all been here a long time. We're very happy that if you'd like to consult us with the concerns that we have on the remuneration report. I'd like to point out that we're voting against it on the grounds that we've set out in our document, our voting intentions, which go on ASA's website, and happy to engage on what steps could be taken to improve the situation.
But we always enjoy the engagement every year with the ASA, so thank you for the comments. Chris, any pre-submitted questions relating to this item of business?
Yes, there's an online written question. It's from Stephen Mayne.
Best practice is to disclose the proxies to the ASX with the formal addresses, but you've withheld them today, which is disappointing given the criticisms about poor late disclosure in the past. Are we facing a remuneration strike, and which of the proxy advisors recommended a vote against?
Also, we have disclosed that Mr. Ellison will pay AUD 3.79 million to the company, being the full amounts of payments to the company made to Far East in 2006 and 2008 without adequate related party disclosure.
If Mr. Ellison accepts he had to repay the amounts overcharged in 2006 and 2008, then why did the board not seek full restitution, including interest, over the last 18 years? Also, Mr. Ellison will, in consultation with the board for a period of five years, make an annual charitable contribution of AUD 1 million from his own funds.
Can the Chair explain precisely how this is in shareholders' interests and how this agreement will be enforced? And why didn't MinRes get this AUD 5 million rather than his arrangement, which presumably would generate a charitable tax deduction for Mr. Ellis on?
Again, I think in our previous disclosures, we've commented on the financial sanctions and the nature of them. We're satisfied that they sort of meet the requirements in terms of recognising the circumstances, so I won't comment on those any further.
In relation to the proxy votes and the display of those, we disclose proxy results to the ASX after the meeting, but we also disclose them in line with our legal obligations during the course of the meeting.
There are no more online questions, Chair.
Thank you. All right. I think we've taken enough questions on this resolution. We'll move forward.
Resolution 2 relates to the election of Director Denise McComish. Details of this resolution on the screen before you. Denise joined our board in December 2023 and is already providing key guidance on company matters. I spoke earlier on Denise's impressive qualifications and experience. Denise has addressed the meeting. The details of the proxy votes cast on Resolution 2 are now displayed on screen. Chris, were there any pre-submitted questions relating to this item of business?
Yes, there's another online written question. It's from Mr. Stephen Mayne. It has recently come to light that a number of company emails writing to Far East were deleted in 2019. The board has concluded that this was an attempt to avoid information regarding Far East becoming public.
These actions were taken around the time that Mr. Ellison commenced the process of self-disclosing to the ATO and before the ultimate voluntary disclosure and settlement with the ATO.
As a member of the Ethics Committee, has new director and board candidate Denise McComish established in her own mind who deleted the emails and why this occurred? Why did the board think these emails would have become public if they weren't deleted in 2019? Did the deletion of emails relate to private litigation Mr. Ellison was involved in?
Again, I think we've addressed that in our 4th of November ASX disclosure. I don't think we've got any further comments on that at this point in time.
There are no more online questions, Chair.
Thank you. As there are no further questions, we'll move on to the next resolution. Resolution 3 relates to the election of Director Jacqui McGill, AO. Details of this resolution on the screen before you.
Jacqui commenced on the MinRes board in January this year and is applying her experience and skill sets to further support the company's growth. I spoke earlier on Jacqui's impressive qualifications and experience, and Jacqui has addressed the meeting. The details of the proxy votes cast on Resolution 3 are now displayed on screen. Chris, were there any questions?
There are no online questions.
Okay, thank you. As there are no further questions, we'll move on to the next resolution. Noting Resolution 4 was withdrawn from this year's meeting on the 4th of November 2024, we move to Resolution 5. Resolution 5 relates to the reinsertion of the proportional takeover provisions for a further three years. Details of this resolution are on the screen before you.
The Corporations Act permits a company's constitution to include a provision that enables it to refuse to register shares acquired under a proportional takeover bid. The proportional takeover provision set out in Rule 6 of the company's constitution ceased to have effect three years after they were last approved.
These provisions were approved by shareholders when the constitution was adopted in 2021, but that approval, and therefore the rule, will cease to have effect on the 18th of November 2024.
The directors consider it in the interest of shareholders to continue to have a proportional takeover provision in the constitution, and accordingly, shareholders are being asked to reinsert the proportional takeover provisions contained in Rule 6 of the constitution with effect from the date of the AGM for a further period of three years.
If these provisions are renewed by shareholders, they will be exactly the same terms as the current provisions in Rule 6 of the constitution and will operate for three years from the date of the AGM. The board unanimously recommends voting in favor of this resolution. The details of the proxy vote cast on Resolution 5 are now displayed on the screen. Chris, were there any questions?
There are no online questions.
Thank you. Are there any questions from the floor? As there are no further questions, I can now advise that voting on all of today's resolutions will soon close. In the meantime, Chris, could you please confirm if we've received any further questions related to this morning's resolution items?
There are no more online questions.
Thank you, Chris. Please note voting will close in one minute. If you have not already done so, please cast your vote now.
I now declare the poll closed. Results will be published on the ASX as soon as practical. Before I close today's meeting, Managing Director on behalf of the board, I would also like again to acknowledge what's been one of the most significant development years in MinRes's history.
Our company continues to demonstrate it as a business model, assets, balance sheet, and skilled workforce to bring world-class projects to life across business pillars and deliver long-term value to shareholders.
These traits have underpinned MinRes's recent success, remain embedded in our business, and supported by a strengthening emphasis on corporate governance will drive MinRes's ongoing growth. This has been the most challenging time in the company's history, and the decisions taken by your board have the best interest in mind, your best interest in mind, and many shareholders, big and small, have told us what they want to see happen.
Where we landed was an orderly transition that would see Chris continue to add his value to MinRes in the intermediate term, and the arrival of a new Chair and a new Managing Director will be planned and not be disruptive to our business. I would like to thank all our shareholders who have taken the time to attend today's AGM, either in person or virtually, and for your questions and discussions this morning.
My hope is that you leave today's meeting with a better understanding of the importance your board places on strong governance and the further steps now in place to ensure we continue to protect and grow the interests of our shareholders and broader stakeholders. As today's formal proceedings have now concluded, I declare this meeting closed. Thank you again for your attendance. Refreshments.