Good morning, everyone. Thanks very much for joining us. It's MinRes's half-year results for 2023. I'm gonna run you through the performance of the business over the last six months. I'm gonna talk a little bit about or a lot about where the business is going over the next two to four years. We'll talk about some of the innovation that we've got in the business, some of the opportunities we've got sitting out there. Mark will join us shortly for a run-through on the financial results. When we get towards the end, we'll take in a few questions. A few highlights. Overview of the first six months of the year. We've delivered a fairly decent result. It's been quite a strong result.
Revenue is up 74%. EBITDA, as you can see, is AUD 939 million. We're gonna declare a dividend, or we've declared a dividend AUD 1.20 a share. Traditionally, we've always targeted 20% plus on return on our invested capital. You'll notice there it's slid down a little over the last period. The reason for that is that we're building a couple of significant projects out there. We're developing Mount Marion, we've started the build and committed a lot of capital on long lead items on the Onslow Iron project. If you take the amount on our operating assets, we're closer to 25% ROIC. I have said in the past, I'm aiming to get between 25 and heading towards 30.
When these newer projects come online, they will deliver that. We're in good shape. We've had more than 16 years above 20%, and we're gonna grow it closer to 30%. Mining services. We doubled the business from 2019- 2022, and we're on track to probably do that again over the next 2- 2.5 years, and that's basically driven by JV activity and a lot of external projects that we're looking at negotiating and talking to. About 2.5 years from now, we're gonna double that business again. As I said, look, there's a record number of inquiries we got out there that not just in Western Australia but around the world. We're looking at sort of expanding offshore.
The iron ore business. We signed FID with our partners on the Onslow project with Baowu, AMCI and POSCO. It's a significant achievement, 2.5 years in the making to get that. I actually first started working on trying to develop that region in 2013, it's been a labor of love. Yilgarn and Central Pilbara. We've been focused up there on reducing costs and product improvement. The iron ore team have done an awfully good job on that. Lithium business. As you would have read, we've signed finally. I mean, it's been, again, a long time in the making, but we've signed a binding agreement where we're restructuring the Albemarle joint venture in Australia.
That's been over a year in the making, an awful lot of work's gone into not just coming to an agreement, but also understanding how we're gonna run that business going forward. We've got a lot of clarity around where that's heading over the next five to 10 years. We've also, we're in full production on both the trains up at Wodgina, that's been great. We have got Mount Marion in the upgrade phase, running a little late on that. I'll talk a bit later about that. We've got Ganfeng working with MinRes on long-term tolling arrangements with all the ore that's coming out of Marion. The energy. We are very focused on developing that Perth Basin. We're doing definition and exploration drilling, or we're trying to.
Drill rigs have been fairly difficult to get. We've got majority shareholding in Norwest Energy, and the acceptances continue to roll in. We're developing renewable energy on all of our sites, and we're mainly focused on solar and wind power to try and eliminate diesel and make sure we're not connected to any coal-fired power. People. People and safety, very, very focused, as always, on attracting and retaining the best people in the industry. Our safety results are in great shape. We're nearing 6,000 permanent employees and contractors on the payroll. The TRIR is at an industry standard low. We've been there for quite some time. We work awfully hard to keep it there.
We drive that primarily through all of the in-house training that we do on our people from inception, when they start, right through to developing and with better skills and better work practices. No long lost time injuries, which is always pleasing in our industry. There's been some tragedy around the mining industry of late. That always brings home how important it is that we get that absolutely right before we go and do anything. As the business grows, the MinRes culture is growing very strongly. As I said, over almost 6,000 in the workforce. Retention on our people is just getting better and better. We're focused on development of our people across the board. A few examples.
We've currently got about 34 graduates, 16 trainees, and we're doing 12 trade upgrades. 34% of those people are what we call next gen. That means that they've got a mum, dad, uncle, aunt, working in the business. They know the culture of the business and our retention rate on next gen people is quite outstanding. We've increased the participation of Torres Strait and Aboriginal people by 68% this financial year. Proud of what we're doing there, but we've brought new systems and people in the business over the last 12- 18 months, and it's working well. I mean, we really have to get those numbers up and get way more integrated, but working hard on that.
We've got a centralized in-house training center now, and we're much faster and safer at getting our people onboarded and getting them on site. We hope that we're gonna improve those safety results through that. We've got a great program running on with our female staff. We call it the Inspire program, and we're helping them grow into leadership roles. We're starting to do the same with a lot of the young, younger generation people. We've just completed the first program on that recently. We've got a very good scholarship program running through Curtin University, where we're bringing in graduates. We're paying them a substantial amount of money per annum to keep them focused on their study, and we're giving them work inside the business as much as they can handle.
We're intending to increase those participants over the next short period of time, up to 15 a year. We've been doing about 10, we're gonna grow that. Again, a great partnership with a great university. We are also or have been on a journey to redefine the, not just the workplace, but the environment that we put our people in, it's all part of to grow the business, we need to get high quality people, and we need to keep them. To do that, we've got to do a lot more than just pay them well. We do pay well in the mining industry, the younger generation that are coming along don't consider pay as the number one attraction in their career. They're very much into lifestyle and the environment they work in, culture.
They've got strong opinions out there, and we've got to make sure that we take notice of them because they're the future of the business, and they're gonna be running it one day. We've got to be very focused on being able to shape it in that way. We've been in our new head office now for eight months. It's a unique experience. It's very different to what the rest of the country's used to or the mining industry. We've created an incredibly different work environment. Our retention's up. The productivity of our people is better than we expected. A few facilities we have in here, we've got a creche. We've got a health center that's now open, and it's operated by some very good doctors and nurses that we've got working with us full time.
We've got a large gym. Over 700 members are using it now. In-house psychologist, full restaurant, with chefs. We feed 800-900 people a day, and they have the opportunity to take away, have takeaway meals for nighttime. Coffee shop staffed by some great baristas. We've got all the facilities in-house where we can bring the people into the facility in the morning. They stay in the facility all day. We have a lot of our clients and customers that wanna come around here and have a cup of coffee in the coffee shop and talk about business. All of that's working well. We're taking that out onto site because we want to really up the retention rate that we have out at our site.
Our first experience is gonna be a resort-style accommodation we're going to build on the Onslow project. Primarily, we're building rooms that are three times the size of the standard dongas that are out on the site now. We're gonna have double capability in all the rooms, so queen-size bed, lounge, big screen TV, kitchenette, separate ensuite, laundry, balcony with a barbecue. Something quite different. It's really gonna be something that's more akin to an apartment. The other reason that we're looking at this and changing to this is we're looking to make sure that our people on site are safer and much more secure.
We think that if we create this community-type environment where there's a very large proportion of females that'll be up there as boyfriend, girlfriend, a husband, wife or whatever, we're gonna have a very different environment. We're gonna build into each of these communities. We're gonna have Olympic-size pools, wellness centers, large gym, coffee shop, restaurants. Trying to create something that's much more normalized. Whenever we're near towns, we're going to start building homes so that we can encourage our staff to go up there with the families and live there full time. 10 houses going into Onslow right now is a bit of a pilot program, and if we fill them up, we're gonna continue to do that. Let's hope that that works. Sustainability.
We as the whole mining industry committed to getting to decarbonization 50% by 2035. As we've said, we're aiming to do better than that and net zero by 2050. We really are in the hands of the outside world on being able to develop a clean, green energy for us. I mean, when that's developed, like everyone else, we'll be able to use that. In the meantime, we're doing everything we can to reduce our carbon footprint. We continue to reduce our use per ton of product produced of diesel. We are looking at how we can transition completely away from diesel. We've got gas as that transition fuel. We think that's gonna play a major role.
It's not the final solution, it's not the ideal solution, it's way better than coal and diesel. I think gas is gonna be around for some time. We are also. We have a strong focus on regional communities, so wherever we can, we are making sure that we integrate with any of the local communities, and we're very focused on the traditional owners that are out there. We've got extremely great relationships with them, all of that's working well. A lot of effort's gone in around Onslow, the gas around Port Hedland, Perth Basin, on making sure that we really are engaged with the community, and that we're gonna provide benefits to the community, we're not going to be obtrusive in any way. Performance over the first half. I'll run through that very quickly.
Had a good look at it this morning. Mining services, we're slightly down on EBITDA and on tons. That's mainly because we've had a couple of contracts come to an end. We have recently had three new mining services contracted to add back into that business, so we're sort of about net square. We've got a very, very strong project of a pipeline of projects, as I said, coming up. I'll go through those a bit later. No concerns around where mining services is going. Iron ore, again, we're down a little bit on the volume, but the price has been much better than the same period. The price of iron ore has been in a really decent place for a while now. All of our sites are operational.
They're going reasonably well. Focused on optimization. The Yilgarn, we've lifted production down there slightly to a sustainable level. We've really improved the product quality down there, so we're getting a bit better return per ton. In the Central Pilbara, we've had a few issues out there with the Wonmunna site. We've got a transition ore out there that's retaining the moisture. We're fixing that over the next few months. Onslow Iron, construction down there is commenced. Long lead items are out and on order. The big transhippers are in the shipyard. In fact, one of them's only about three months away from rolling off. The only issue we've got up there again is the hangover from the pandemic, from COVID. Everyone is short of people.
The government agencies are short of people. Getting approvals done now, I'm gonna say it's like somewhere between two and three times longer than it was three years ago. Not to say the government isn't doing everything they possibly can to help the project get underway. They are. Just short of people and they've got a lot in front of them. That project we look like first ore going on ship in about somewhere around May or June of 2024. Not overly happy with that, but we can't do a lot about it. Lithium performance has been fairly decent. 177,000 tons of spodumene shipped, so we're up on that. We are turning into a chemical producer.
In the half, 11,284 tons of hydroxide and 1,080 tons of carbonate. Grand total of 10.6 thousand tons that we've produced. There's always a difference. We've got to be a little bit careful and point out there is a difference between tons that are mined, shipped, converted and sold. There's quite a long lag on all that timing. Pretty proud. We're the first Australians to get into downstream production. As I said, the lead time for ore coming out of the pit, turning into spod, and finally getting to its destination somewhere in China, Europe or the Americas, takes quite some time. We're getting there with that. Mount Marion's been running pretty well, running at steady state.
We're doubling the size of the plant down there, and we're doing that while the plant's running. Challenging. The upgrade's probably running about 3 months behind. CapEx is fine. There's no change in the capital spend. Just the degree of difficulty, again, people and trying to make sure we're producing while we're upgrading. We're also doing a couple of studies down there on dry stacking the tails and water recovery. Trying to be a lot more responsible on how we operate the mines. Wodgina is going fine. Two trains are running. Train three is actually running, but we're using that as an R&D plant. We've got some different ore types up there that we're dealing with, and we've also got a lot of work around the pit to do on.
We've got a bit of a mountain to move before train three can really come into full production. We've commenced a study up there on building somewhere around a hydroxide plant or somewhere between spodumene and hydroxide. I've been very keen to be able to bring that production back into Australia. We've got a steady second study running out there on building train four. It may be a bigger capacity train than the three we got running, but that's going well. The binding agreement finalized, as I said, with Albemarle, and we've got them in the tent on both those studies. They're going pretty well. On the energy, haven't done a lot in the Perth Basin over the last six months.
Been incredibly challenging with the drill rigs. We've got one heading for there now. Carnarvon Basin, again, not a lot done. Highly prospective region. We've got about 500 Ks of seismic reprocessing that we've done. We're having a look at where we're gonna put our first drill holes down out there. We expect to do two of those in 2024, and we're also starting to look very closely on geothermal, and we've started exploration work in that region. We've got about to give you an idea of size, we're the largest land holder in the Canning Basin in joint venture with Buru Energy. They have a 25% shareholding. We've got about 17,500 square kilometers.
Again, we're the largest land holder in the Perth Basin, which a lot say is the most prospective land in or for gas in Australia. We've got about 5,300 sq km up there. It's sort of a bit of a rundown on where we're at on the first half. Mark's gonna run you through the financials, then I'll come back and tell you where the business is sort of heading over the next two to four years. Thank you.
Thanks, Chris, and good morning, everyone. I'm Mark Wilson. It's a pleasure to be here with you this morning to walk you through the first half results for MinRes through FY23. As Chris has mentioned, we've had a strong and stable start to the year. I believe the performance in the first half demonstrates the robustness, yet again, of the business model that we employ. Our balance sheet remains healthy, and we're in good shape to support the growth that we have in front of us. In terms of the underlying profit and loss, first half has seen us deliver a record first half revenue of AUD 2.35 billion. Underlying EBITDA of AUD 939 million is our second best first half result. Lithium's been our strongest contributor in the period, almost three.
Just over three quarters of a billion AUD at AUD 756 million. Through the half, we've accelerated our amortization on our iron ore projects. That's driven the increase in depreciation amortization that you see there. Our underlying net profit after tax coming in for AUD 387 million, as Chris said, the board has declared a fully franked dividend, interim dividend of AUD 1.20. The next page shows the movement and performance on the prior corresponding period. The big story here is lithium. Lithium in that prior period was a AUD 61 million contributor, up almost AUD 700 million. You see there the real benefits of the move to the integrated production that Chris referenced. Costs in the first half, generally across the board, consistent with the rest of the industry. We're seeing that in labor. We're seeing that in plant.
Pretty much every category is under pressure to some extent. We've also seen some increased costs at Marillana as we've opened up some new mining areas. The external contracts have a rise and fall mechanism in them to protect them against costs escalation, but typically have a lag, sometimes six months, often 12 months, so we haven't yet seen the benefits of that rise and fall protection kick in. Overall, we're maintaining our full costs... Sorry, full year cost guidance. In terms of the cash flow, the story here is in the increase in working capital that's supporting the growth in the lithium business to an integrated producer. AUD 380 million. I've got more detail on the next slide to walk you through on that. You'll also see increase in CapEx there.
That's driven largely by the spend in Onslow as we build out the growth story for the next 30- 50 years. In terms of the movement in working capital in the following slide, you can see receivables increased by over AUD 400 million. The lithium receivables are to Ganfeng and Albemarle, from them. Just those two parties, again, driven by this move to integrated production. Iron ore receivable increase is largely driven by the higher price achieved for the commodity. In terms of the timetable for our conversion and working capital, we've tried to set this out to help investors understand how we How and when we recognize revenue and cash for our lithium operations.
You can see from this that the timing to receive all the cash from our conversion or production of spodumene can be up to six months, four to six months, depending on the project. The first half has seen an increased impact from Wodgina as we've ramped up from nothing and built those inventory and receivable balances up. In terms of the capital expenditure on the following slide, you can see it's pretty much running in line with where we were 12 months ago. The only real difference is the spend in the half on Onslow. As Chris said, early items, long lead items, really see that ramp up in the second half. In terms of the balance sheet, balance sheet remains very healthy.
We've got cash and undrawn facilities sitting at over AUD 2 billion. Just to put a little bit of context to this, three years ago, the capital employed in the business was AUD 1.9 billion. It's now almost AUD 5 billion. It shows the growth in the balance sheet over that period. As Chris said, we are absolutely committed to driving returns on invested capital well in excess of 20%. Nothing has changed in that respect. We expect to continue to do that into the future. This business has had a very successful history over 30 years of allocating capital efficiency. That's not changing now. In terms of the net debt waterfall on the next slide, net debt's sitting at AUD 1.4 billion. Nine months ago, we had very strong support from the bond market, the debt market.
We've brought net debt back below one times EBITDA. It's sitting at 0.8, and gross debt is now sitting below two times at 1.7. Happy with that positioning. Interest coverage remains very strong. There's more detail in the back of the deck on the credit metrics. Next slide, I just wanted to show the impact of the shift in the business as Chris described to this integrated lithium production. You can see in those two charts just how important that is for us and will be going forward. It's had a material impact on the diversification of the earnings. In terms of the CapEx guidance for FY 2023, we've increased it by about AUD 300 million from where we were in August. That's largely off the announcement yesterday around Albemarle and the restructure of the Australian arrangements.
We've added in about half a billion dollars there for that initial amount that was outlined in that announcement, $350 million. We've pulled back Onslow AUD 200 million just because of the delays with approvals and so on that Chris was referencing earlier. Overall guidance for the business remains unchanged for the full year. Over this period, we've gained more visibility as, again, as a result of the announcement yesterday around the outlook for our lithium battery chemicals business. For the first time, we've provided some guidance on production and sales for that part of the business. Pleasingly, as I said, for the full year, we're expecting to be where we thought we were gonna be in August. Before I hand back to Chris, we're just going to play a short video for you. Thanks.
Okay. I hope you enjoyed that little movie. It often gives you a really realistic view of what we're actually doing on site. We're trying to do that more and more so that our shareholders can actually see the size and the quality of the operations that we're running. Look, Mark, thanks for the financials. Let me just run you through where we're sort of heading in the second half, where we're going over the next two to four years is sort of fairly important. I don't know why, for some reason, our second half is always better than the first, this year is gonna be no different. The second half will be substantially better than the first.
Over the last six or so months, the business has been incredibly busy. We've been out there doing a whole lot of different things. I mean, look, in essence, we've put some stuff together. We think we've set the business up with 20- 50-year contracts in operations and deposits. We're going down a pathway now where with the foundations in place so that, you know, 50 years from now, the business is still gonna be around, and it'll still be growing. Just a few of these achievements, just to give you a bit of a snapshot of what we've done. Of course, we've got the Onslow iron business develop, that's nothing to take lightly. It's a 35 million ton operation on day one. It's got billions of tons in that region.
You've sort of got the regions in the Pilbara. You've got the top of the Pilbara, where BHP and FMG operate in Roy Hill. In the middle, it's sort of owned by Hamersley Iron, Rio Tinto. Below that, this region's always been locked up. It's been difficult to get the right infrastructure in it, but quite an achievement. I'll talk a bit more about that later. We have restructured the lithium business both with Albemarle and Ganfeng, and we've got a fairly good lock on where that's heading now over the next 10- 20 years. And the plans around how we can how we can grow that in a sensible way. We've moved from being a spod producer now out to being a battery chemicals business in our lithium.
We are a primary, primarily producing hydroxide, and we'll be doing some carbonate. The intention going forward is that we wanna get the upstream value of being able to convert all our spod now into a chemical. We're gonna look at the most efficient and the opportunities that give us the best return going forward. We're sort of well advanced on doing that. We're very shortly, in the next days or week or so, we're gonna make application to the Chinese government to buy a 50% share in two hydroxide plants. We're doubling production at Mount Marion. We're growing our mining services business rapidly. We're doing that through transhippers. We've got five of them under construction.
We are looking incidentally at being able to take these transhippers offshore to other areas where we've got a lot of interest. We've developed the big jumbo road trains. It had been quite an innovative move. We're moving closer now to the cost of rail on these big trucks. We're moving 340 ton payload with a single prime mover and do it incredibly safely. And looking very shortly to have those driverless. We're exploring a couple of large offshore opportunities, and we're basically down to negotiating terms on those. Many, many years ago, we were offshore Africa. Did some operations over there, but we've always been pretty much WA based, but we're gonna change that.
We consolidated our JV with Hancock on building the Cape Carrier berth out in Port Hedland and doing all the work around getting that developed. We have developed substantial plans around where we're heading in the Perth Basin. That's important to us. It's gonna become a significant pillar in our business moving forward, and it's gonna give us a lot of opportunity in downstream. The foundations for going forward, the next chapter, we've moved from mining services contractor through to an upstream miner. Now we're looking to go into a downstream supplier, which is quite a significant change, but it's an evolution.
Giving the business much more stability, much more longer term in terms of our projects and our operations, and much more predictable on the margins and the revenue that we can make. As I said, we're exploring options outside of WA and offshore for all the business pillars except the gas. We are in some areas where we're under negotiation. Mining services, very important to the business. It is the foundation of MinRes. It provides the design, development, the engineering, the construction of all of our plants with both our mining services and with our joint venture partners. They're incredibly innovative. They've got proprietary products out there, and we're taking some of those products to the international market. Iron ore, we're committed to iron ore.
It's got strong fundamentals. It's, we're focused on long-term, low-cost operations. We're looking at diversifying our products and markets and reducing supply chain costs. We're doing that in a range of different ways. Onslow Iron, it's an impressive project. But again, it wouldn't have happened without the innovation of our products that mainly on the haulage, the haulage from mine site into the coast. The project wouldn't support heavy-haul rail, again, the transhippers from the coast offshore to the Cape Carriers. Again, project would not support digging a trench and building Cape Carrier-type berths. A lot of good things happening in that. Lithium, as I said, we've restructured the whole of the Australian business. We're expanding as a fully integrated battery chemicals producer.
We're supply looking at more supply chain value. We're starting discussions with OEMs. That's where we think we need to be. In the energy, a lot of work to do around that. It's gonna be an enabler for us to reduce our carbon footprint. A big part of the energy business is working on how we can develop wind, solar, and cleaner and greener fuels. That's a lot of people in-house dedicated to trying to make sure that we achieve or, in fact, we better the targets we've set out. I'll just give you a little bit of detail around each of the business pillars. As I said, the heartbeat of MinRes is the mining services.
They're the largest contractor in the world when it comes to crushing, they're one of the very large leading mining services contractors. They're doing that on the back of being able to provide innovative services to customers, low cost, consistent on production and a very, very safe contractor. In many cases, we run better safety results than our clients. We have the ability to do that because we are a diversified business, and we can move them through our mining operations into our mining services with a whole portfolio of training that we build around them. We're running about 2,500 people in the workforce in the mining services. That's probably gonna grow by about another 500 during the course of this year.
In doing that, as I said, a lot of the proprietary equipment now, we're reducing the headcount on it, both on the trucks and on the big next-gen crushing plants. Eventually, they will be run by remote control. We're one of the few organizations left in the world that can actually go out and design and build a plant on a fixed lump sum. We do all of that in-house, that gives us a huge amount of flexibility. It's a significant cost advantage to all our partners and clients when we can do that.
Although in saying that, we're not exactly where we'd like to be on Mount Marion, I think others are in far worse shape. We've got great long-term 20-25 year relationships with a lot of our Tier 1 clients out there, a huge amount of trust placed in us. We've got, with the innovation we have now, we've got the capability of moving stranded tons that others can't do. We can dig them, crush them, we can haul them at a fairly low cost, and we can even put them on our customers' ships in remote locations. The economic benefits that we're delivering to our JV partners and our customers is a big part of the reason why we always have fairly good growth behind us.
The crushing business, they intend to install new NextGen three crushing plants. This is the latest innovation, again, going into Marion now not too far down the track, we'll be putting them into Onslow Iron. We expect to put probably another three to five of those away over the next two years. We've got 42 of the big jumbo road trains out there operating, and that's a mixture of outside clients and on our own ore bodies. We will add about an extra 170 of those to the fleet over the next 18 months. Five transhippers, as I said, are under construction. They'll be coming into Onslow. The first one of those is not that far away.
A lot of those contracts that we're entering into now, they're 20-40 year type contracts, so it gives us a lot of stability. We can predict where we're going and make sure that we've got everything in terms of maintenance and planning and budgeting much easier. As I said, they're pursuing some offshore opportunities, so we'll let everyone know if when that happens. Iron ore business. As I said, we're committed to the iron ore. Strong fundamentals on iron ore. The largest mining companies in the world use iron ore as their staple. They've been in it for decades. It produces a very positive outcome every year if you've got the right deposit, and you can get it on board a ship at the right cost.
That's where we're heading with Onslow and other projects. Traditionally, though, the price of iron ore, I mean, over the last couple of decades, it's incrementally grown. We've seen some incredibly high prices and some ridiculously low prices. It feels like we're getting much more stable where we're sitting. Globally, the mines are, they're getting further away from their infrastructure. Their costs are going up. The grades are slightly declining. We think there's good support for iron ore at around about AUD 120 a ton. We think there's very strong support with that, but, you know, it's unpredictable as we all know. No one knows exactly where it's going. We're transitioning our iron ore business into a long-life, low-cost operations.
The key projects that we've got in front of us, we think will take us to about 90 million ton run rate. Onslow, which I spoke about. Yilgarn, we're improving the quality down there, we're also looking at being able to do magnetite down in that region. We've got an awful lot in the ground, we're doing a lot of test work around that. The Pilbara Hub, we are working up there very closely with Hancock in a joint venture where we've got a Cape Carrier berth in the inner harbor of Port Hedland. The central Pilbara, it's running at a steady state. Smaller, higher-cost operations. Not sustainable over the long term. The Iron Valley deposit has always been challenging.
It's had a number of lives, but we seem to be able to keep that going. That'll be something we'll be looking at closely. Just a bit of an overview on Onslow. FID approval from all the partners in August. MinRes is going to fund the project, design it, construct it and operate it. The partner's share of that funding will come back to us when the mine's in operation. Most of their income will come to us until that's repaid. We're developing a great supply chain in that Ashburton region down through to the Onslow Port, where it's unlocking billions of tons of stranded iron ore.
The Red Hill assets alone out there give us at least 30 years' run rate at about 35 million ton a year. The FOB cost means that it's very profitable through all the cycles we've seen over the last 15 years. A great project. Only made possible through the innovation that come out of the CSI business with the next-gen crushers, low cost, and they'll have a 40-million-ton plant, and they're doing 35 million ton. The big jumbo road trains gets it down to the port at a very low cost. They're low, and the transhippers, low draft, so they can come in close to the shore. We've pretty much finished the dredging out there and we're about to start that, the transhipping berth. All of that's going well.
It's probably the first commodity project in Australia that's been designed from day one to be totally dust-free. The iron ore won't see the light of day from when it goes in the big jumbos 150 Ks out, until it's going into the Cape carriers 22 miles offshore. We've been very mindful to make sure that we keep Onslow and that whole region pristine. We've engaged with all of the farmers out there, the communities out there, to make sure we've got everything as it should. The private haul road that we're building, there'll be zero interaction between our trucks and any other traffic whatsoever.
That haul road will be fenced both sides to make sure that we don't have any of the local community's stock wandering onto the roads, which is really important to get that relationship. Early works are commenced. We're finalizing approvals first. Ore's expected around May, June of 2024 now. CapEx is unchanged. We're fairly locked on the AUD 3 billion that we'll spend, no surprises coming from that. Energy market, gas, and the energy business in MinRes. About seven years ago, we identified the need to have some long-life gas in the business so that we could fix the costs of what we're doing.
We think we can provide gas into the MinRes business for about AUD 1-AUD 1.20 a gigajoule, and then above that, whatever the cost is of transporting it. You know, AUD 2 a gigajoule would probably be what we can do, and we can do that for the next 20, 30 years out. Huge opportunities for us. It's, as I said, we see it as a transitional fuel. It's not the final answer, but it'll get our carbon down. We've got a lot of work to do on that Perth Basin. Over the next three to five years, we're gonna be drilling a lot of both exploration and development holes. Quite a few highly prospective areas out there. We do expect to hit quite a bit more gas.
We expect to bring the Red Gully plant back online over the next two years as well. The ultimate aim for up there, I think it'll be a help with WA because they're predicting that there's gonna be a little bit of a gas shortage in a few years ahead. I think we can help fill that hole. I think ultimately, where we're looking for is those, again, the 30-year-plus operations. We'll be looking at the lithium chemicals business, so we can provide energy for that. Iron ore pelletization, again to make our iron ore product cleaner and greener, and better for the blast furnaces, particularly around magnetite.
Other products like ammonia, and urea, we can be, I mean, the lowest cost producers in the world simply because we've got gas onshore about 400 Ks north of Perth. It'll be a major part of the business going forward, and we're fairly focused on that. We've got an offer out in the market at the moment with a takeover for the Norwest Energy. We're at about 63% of that so far, and I would encourage the shareholders that are out there to have a long, serious look. We'll probably be taking over the board very shortly. We encourage everyone to have a look. If we can get beyond 80%, that means that all of the Norwest Energy shareholders get rollover relief.
In other words, no tax to be paid, and they can be part of that same project going forward. They're not giving it away. They're actually adding the rest of the other 80% of that gas field to their portfolio, plus where we're going in lithium, iron ore, and mining services. The past couple of times we've done this, the shareholders have got great benefits out of it. Look, I really encourage us to have a look and get on board with that. I mean, when I first got involved with a company out there called Empire Oil, which was where we got most of our land from, the value of Norwest Energy, their market cap was about AUD 13.5 million. A junior company, as was Empire.
Not a lot of money had been spent on putting drill holes to the right depth and doing the right research. It did need some money and needed a balance sheet to make that happen. For all those out there that are a little negative around MinRes, we have taken your market cap from AUD 13.5 million to about AUD 450 million. Not a bad start. If we join together, we can do much better. Lithium portfolio. It's a monster business we've got with lithium. We've got world scale on what we're doing. High quality. Our deposits both operating. We're in a tier one jurisdiction, probably the best jurisdiction in the world. Mount Marion, tier one asset, 50-50 JV with Ganfeng. MinRes designed, built, and operated.
Upgrades, as I said, are underway down there. We first built it in 2016 and got it to 450,000 tonnes. We're taking it up to 900 now, that should start commissioning in April. Lots of exploration potential down there. There's about 80% of our landholding all around the mine that's simply been unexplored. We drilled sufficient out to create a mine, and we haven't done too much drilling since, so we'll be thinking about doing that. We've had some drill rigs down there in recent times. We've got three good target areas down there, and we've got some very good early results for our pegmatite and extensions.
We're going to get more serious on that and just see if we can have a look at bringing some other areas online and seeing if we can get a better balance on the strip ratio. Wodgina are one of the world's largest, if not the largest, 50/50 between Albemarle and MinRes, another great partner. The pit up is open in all directions and at depth. I mean, again, it was 100% MinRes owned, and we drilled it substantially until we had as much ore as I needed for my lifetime. But look, there's certainly a lot more to be had up there, and I think we're going to probably do some drilling up there. Not this year, probably next year, and just see how much deeper it goes and how better the grade gets.
Two trains up there in operation. The third one's actually operating, but we're using it for a lot of test work around transitional ore. Some lepidolites that we got up there, we're doing test work on that. We've got another fleet of mining equipment that's gone into Wodgina, and we've got a mountain of rock to move so that we can get at the ore body and make it sufficient so that we can feed that third train. That'll happen towards the back end of this year. Of course, we've got a couple of studies underway up there. We're looking at what we can build up there for downstream processing, and we've got another one running on fourth, getting near completion. Spod conversion in the business.
We've got a life of mine conversion agreement with Albemarle, and that's for the four trains coming out of Wodgina. Separately to that, as I said earlier, we're making application to the Chinese government to see if we can buy a 50% share on those two plants. They've got a 50,000 ton plant, Meishan plant they call it, under construction. It's probably half-built. They've gone very well on the construction on that, and they're pretty much on time and on budget. They've got, we've got a second application in to buy another plant they've got in Guangzhou, and it's an operating plant. They bought that last year. It's operating. They're putting Greenbushes dirt through that. We hope, hopefully, we'll get the approval of the Chinese government.
We need to do that because we need to be quite early to market with our hydroxide. That's the best way of getting there. As I said earlier, we're very keen to do development in Australia. I think that it's doable. Kemerton, two 25,000 ton trains down there. Train one's in operation. It's almost qualified. We're hoping that we're gonna get some good product coming out of there in the next month or two, and train two's in commissioning phase. Kemerton going fairly well. I mean, Albemarle have made a few comments in their release last week where they've had some issues down there with labor and the like, but we're slowly overcoming that. The MARBL agreement. MARBL, of course, is that what we call the Albemarle joint venture.
We've named that MARBL. It owns the Australian assets. We signed off on that binding agreement on Wednesday. Been quite a long time in the making, around doing those documents, I think 57 in total. Around doing that, we're also figuring out how we're gonna run the business and develop it over the next 10- 20 years, we've pretty much got a good handle on that. Most of that agreement's backdated to 1st of April 2022, it's also subject to regulatory approvals in Australia. We need FIRB and mines department approvals to get that totally binding. Once that happens, we will pass them over a check.
I think we publish all of the money that goes back and forward, then we'll be fully engaged with them, that'll be our share of making sure we're locking in the hydroxide production. Kemerton, we've reduced our shareholding down at Kemerton from 40% down to 15%, I think the reason we've done that, this deal this way is that I think we're now really well aligned. Not a lot of margin for MinRes coming out of Kemerton 'cause we have to buy the product out of Greenbushes. A great story for Albemarle, the opposite for us up at Wodgina. A much more balanced deal. We're running Wodgina. That's our core business, being able to mine and process and operate.
Albemarle take care of the chemical side. Again, their core business, that's going well. We've also taken back the marketing. It's going to be a first for MinRes marketing, this style of product. We've had many firsts in our career over the last 30 years, not something that's going to be difficult for us to figure out. We're converting all of our spod to hydroxide with a bit of it will be carbonate. We have no product that's locked into any contracts. We've got no legacy contracts, and we've got no forward contracts whatsoever, quite a unique position to be in.
We're going to be having discussions with a whole range of buyers out there, OEMs mainly. Yeah, look, I'm sure you got a few questions around how we're gonna deal with that. Total CapEx for offshore for us is about $650 million U.S., not a lot of money in the overall scheme of things for the conversion that we're gonna get. This slide here shows you a little bit of a an overview of the unique market position that we're sitting in. We've got world-leading partnerships with two JV partners in Ganfeng and Albemarle, both very strong and just simply been great partners to have. We're now developing that marketing strategy. Our focus, as I said, is gonna be on the OEMs.
We've got exposure to three of the world's best lithium mines. They're all operational, and they're proven. They're all WA-based. WA probably, I've said this often, it's probably recognized the most ethical mining region in the world. I mean, we are right at the top of the charts in terms of how we look after our people, how we make sure that they're safe, how we care about the environment, and the relationships we have with communities. I mean, we're in a very good position. We're gonna be very focused on being able to maximize our chemical conversion going forward. That's the way that the business will grow. And we're going to get some fairly decent long-term JV partners locked in with us on buying.
Next three months, we're gonna be busy, talking to people around the globe on how to deal with it. The demand for the product, incredibly high. We struggle to see how, as do the other producers and our partners, how supply's gonna keep up with demand. I mean, it's been struggling for some time. I think that they're still trying to figure out how many electric cars they're gonna make year on year. Not all the car manufacturers have come out with that, but with couple that we have been talking to, are well advanced in where they're heading, and they know how much product they need. They know that it's gonna be incredibly difficult for everyone to get the quantity they need.
I think most of the serious demand out there, I'm not talking about, I'm not talking about some of the analysts coming out with comments. I'm talking about the institutions that understand how many tons are needed to make the batteries for the cars. There's just not enough on the planet. I think everyone underestimates, too, the time it takes to get one of these operations running. I mean, for us to get Wodgina, two trains running and then get the 3rd, you know, that 3rd one, it's sort of an 18-month project. The lead times are getting longer. To turn the 4th train on is probably, from when we hit the button, it's probably two years to make that happen. You've got the long lead time on hydroxide.
There's a lot of time and work in getting the approvals now, on just on these operating mines. You go into new regions to open up the new mines, it's gonna be incredibly difficult, but not impossible. I mean, we're yet to get a clear picture on the demand. We think that probably, I, what I'm understanding is that most countries are gonna be looking at having no new, no new combustion engines on the road after 2035. You know, you sort of get a bit of a picture on, by 2030, how many of the new cars coming into production need to be electric. Stationary battery power storage is becoming much more important. It's becoming quite a big story, and there's quite a lot of demand around for that.
I think a lot of the OEMs and the battery manufacturers are really starting to think about putting capital back into mines. They're talking about it more. We're seeing them joining up with the miners. I think for them to spend the billions they have to commit to a factory to build cars, they need to have a guaranteed supply. We'll be directly engaged with the OEMs. Transition into the integrated lithium chemicals producer. We're on track, I think, within about four years to produce about 120,000 tons of hydroxide. The first half of this year, we've done 11,000 ton. We look like doing 19, so that takes us up to 30,000 ton this financial year. We'll keep growing that year-on-year as we move forward, obviously.
We wanna build downstream capacity in the Pilbara, as I've said. We're working hard on that, and we're gonna continue to look for other deposits internationally and in Australia. I mean, we're looking at a number of different regions where we've got pegmatites, and we're gonna grow our reserves and resources. We are having good discussions with state and federal government, and they are very supportive of us building in Australia. We're just seeing if we can get them to come up to close to some of the tax breaks and the financial investments that other countries are willing to make.
If we can get our government to come across with some more benefits to help us to convince our JV partners, to get involved, we'll have a much better shot at getting plants built here. Look, I'm gonna close now. I think it's sort of enough. I think I've gone on for long enough. Look, we've delivered a good first result. Second one's gonna be better. There's a lot of effort underway to set us up over the next 20-50 years. We're building some of that now. We're getting approvals for some of it, but we've got all the foundations that we need.
We're gonna expand into a fully integrated battery chemicals company, and we've locked in substantial growth in all of our businesses, and we've got a good plan on where we're heading over the next sort of 2- 5 years. We've got great tier one assets. We're in the best tier one mining jurisdiction in the world. We've got great partners. Getting really high quality people on board in the business. Our track record has been strong so far, as we get a better balance sheet and the company grows, we get better and better. I'll wind up with that, if anyone out there has got any questions for Mark or I, we'd welcome them.
A reminder to ask a question via the phone. You will need to press the star key followed by one on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the Ask a Question box. For those in the room, we have a microphone. Please raise your hand and wait for the microphone before asking your question. When asking a question, please state your name and affiliation. As a courtesy to others, please limit yourself to two questions at a time. If you have further questions, you're more than welcome to rejoin the queue to ask further questions. Your first phone question today comes from Paul Young with Goldman Sachs. Please go ahead.
Thanks. Hi, Chris. Hi, Mark. I hope you're well. First point is on the Albemarle JV. Well done for getting it done. You got there in the end, and it actually appears very value accretive in the spreadsheets, so well done. First question, Chris, is on the timing of the switch from the current more expensive toll treating arrangement and feeding the Wodgina concentrate into the Albemarle facilities. Just two points on that. With Qinzhou, does Wodgina concentrate feed in as Kemerton ramps up? On the commissioning of Meishan, what is actually the timing of the commissioning and ramp-up of Meishan? Thanks.
Meishan. Paul, thanks for that and welcome. Meishan is around mid-2024, they're expecting that to ramp up quite well. I mean, it's pretty much a copy over of what they've got over there. They've got a stable workforce over there. Qinzhou, the one that we actually call Qinzhou, cause it's much easier to pronounce. That one's operating now. It's taking Greenbushes dirt. It needs work done to take Wodgina dirt, we're going over to flotation style dirt. It's about a year in getting the long lead items and getting all that done. They'll continue to run that until they convert that over to Wodgina.
In the meantime, all Wodgina dirt, they're putting arrangements, and they have a lot of arrangements in place over there for toll treaters. Most of the Wodgina dirt's gonna go out to third parties until we get those sort of two plants running. They have the capacity to do that, and we've got an arrangement with them where that's their skill and expertise. We just send the dirt, and they'll convert it. We do get in the Qinzhou plant, once we write the check for the conversion for them doing conversion, we do then share in the benefits of that Qinzhou plant.
Yeah.
That'll happen immediately after getting approvals here from the Australian government and the mines department for this transaction, the Australian transaction to happen, which I don't know how long that'll be, but it should be fairly straightforward.
Thank you. Your next phone question comes from Hayden Bairstow with Macquarie. Please go ahead.
Morning, Chris and Mark. Just echoing Youngie's comments. I think well done again, that Albemarle deal done finally. Just interested to understand a couple of things. Firstly, growing the lithium business from here, is it likely that JV and the Ganfeng JV will be how you try and structure the business? Do you see, you know, yourselves going out and trying to find other assets to continue to grow this business more medium-term? The second one's just on, you know, Wodgina and potentially building downstream in Australia. I mean, obviously, this deal you've just done with Albemarle, the capacity cost is half of what it's cost other players in Australia to build capacity here.
I mean, is that something that you look to take to the government to try and get some financial aid, given the increased costs to get downstream capacity or more downstream capacity built here? Thanks.
Look, apologies for the technical side. Look, the first part of your question, Hayden, yes, we are. Look, we're looking to expand beyond the joint ventures in our own right, both in Australia and internationally. We're also Obviously, we're expanding Mount Marion. That was a fairly easy arrangement to come to with Ganfeng. We will be growing Wodgina. The way we will grow Wodgina, it'll be, first of all, we wanna make sure we've got conversion capacity in front of us. So that's a combination of what we're applying to buy in China, downstream processing in China, and hopefully being able to build in Australia. We do need government help, otherwise we're simply not gonna get our joint venture partners in Australia.
It is incredibly positive to Australia if we can get those plants down here. I mean, we're keen to do it ourselves, we can't get it done on our own. The opportunities that are being offered by the U.K. and Europe and U.S. is very significant. Again, you know, it's more than worth them doing it.
Okay. Great. Thanks for that.
Thank you. Your next question comes from Kaan Peker with Royal Bank of Canada. Please go ahead.
Morning, Chris, Mark, and team. Following on with the same line of questioning, just on finalizing that JV agreement. With regards to downstream processing, of the 100,000 tons capacity, I think 75 was outlined. Where's the other 25 capacity coming from?
That'll be basically extra capacity that Albemarle will probably build. We've simply got an arrangement with them where they're gonna provide that 100,000 tons as it's required. I'm not quite privy to all of their plans and firstly, and secondly, we have to have the approval of the Chinese government before we can go and give out information that's confidential.
Sure. Understood. Is there a certain region that's being considered or that's not really been provided yet?
Look, Albemarle have plans locked away on what they're gonna do. Outside of that, we are considering other regions as well. We're gonna do some study work on that. They have a fairly clear understanding of how they're gonna convert that.
Sure. Thanks. The second one was more around the opportunity of lowering grade or of spodumene concentrate at Wodgina? I think there's a present slide in the presentation that mentions it. Just sort of 10%-12% uplift in recoveries. Is this something Min plans to go ahead with, and does it need sign-off from Albemarle? Thanks.
Look, we have an agreement with Albemarle on that, and we've actually started that now. As of, I think, early January, we went into the 5.5% range and that, you know, obviously just gives us better recoveries overall.
Sure. Thank you. I'll pass on.
Thank you. Your next question comes from Lachlan Shaw with UBS. Please go ahead.
Morning, Chris and Mark. Well done again on the finalization of the JV. Just a couple from me. Just on Onslow, the pushback to mid-2024, can you just sort of run through that again? I might have missed earlier in the call. What's driving that pushback in timing, please?
Purely around approvals. Approvals have been much slower than we anticipated, and the reason for that is that over the last two years or so, and almost as a direct result of COVID, the department's been, or the departments, the agents, government agencies, have been shorthanded on people. That's half created by the mining companies. The mining companies have been stealing the government people. They've been running shorthanded, and it's simply taking two to 2.5 Times longer to get approvals done, whether that's be through mines, environment, or anywhere, than it was, you know, going back in 2020. All our studies had the right times in them. We just didn't understand that the time lag that it was gonna take. They're all in hand.
I mean, we've been getting a lot of support from government, from the ministers, the departments. Everyone wants the project to go ahead. It's just taking much longer than we anticipated. We expected to be well under the whole road now, we're not. We're just waiting on that final approval on that to come through. That's sitting out for public comment at the moment. By about, look, end of March, we should be on the move. We have been given the go-ahead on certain areas, we've got early works going on out there in a range of areas at the moment. We're hoping we can pull that back from that. We wanna give you the most likely news.
Okay. Great. Thanks. Just, second question. Given that, would that have any impact on potential timing of studies on the fourth train at Wodgina? I guess how should we think about timing there, in any case, given that, you know, you've just finalized the JV restructure, the agreement to go to 5.5% done? You know, how should we think about that timing and the studies and that fourth train at Wodgina? Thanks very much.
Yeah. Look, I think, we're only probably a couple of months away from finalizing the fourth train study. I mean, I think the decision on that'll be fairly quick. The answer is yes, that, if I was building that in 2019 or 2020, I would think it would be a year, 12-15-month build. Today it's more like a two-year build. At least two years away. We've got other issues surrounding that as well, because we've gotta make sure now that we've got all the changes that are going on with the traditional landowners. I mean, our relationship out there is very strong, but, we've gotta make sure that we've got all of those new agreements in place. Again, a lot of work to do around that.
Thank you. Your next question comes from Glyn Lawcock with Barrenjoey. Please go ahead.
Good morning, Chris. Chris, look, you've, I guess, essentially enabled Albemarle to get their capital out of China and relocate it back into Australia, and you've done the reverse. How comfortable are you know, they're putting all this capital into China? I think since the JV discussion started, I think the landscape has probably changed a little bit. Just interested in your thoughts on how you're thinking about that, 'cause, you know, we saw what happened with Russia and assets there became worthless. I'm just wondering how you think about China. Thanks.
Yeah, I mean, that's a really good question. I mean, our relationship with our Chinese partners has always been incredibly strong. You know, the issues surrounding the... How would you say it? The issues surrounding the cultural difference between two countries is quite strong. We are concerned. We've had long discussions with Albemarle around that issue. Look, the returns that we get out of these plants in China is seriously significant. The payback is incredibly quick. We think for a number of years, three or four years out, I think we're relatively safe. We've looked at it on a short-term investment basis, and it's more than worth doing that rather than taking the time to go build somewhere else.
I mean, it's one of the issues that's kind of sort of slowed MinRes down. I mean, I think you're an American company. I think it's the risk is somewhat less, but it is easy for Australian products, as we've seen with coal and wine and wheat and barley and the likes. It's fairly easy to turn Australia off. It's a concern, but it's a calculated risk, and I think that the payback is gonna be significant.
The other point.
Yeah, no, I get it.
Glyn, it's Mark. Hi. The other point I'd add is, obviously we're talking about pretty strategic minerals going into China. There's big demand for it inside China. We think it's a sort of a symbiotic relationship. There's no real alternative for them.
Yeah, I get that. I just, you know, I look at what the market did to the value of Russian assets as well when things go pear-shaped. Just a second question, if I could, to clarify. You talked about, I think to answering Lachlan's question, you know, you hopefully have by end of March, the permit for the Onslow Road. Is that a critical date, like, to make June, well, middle of 2024? Or what is the critical date for the road so you don't slip again on Onslow?
I think we really need to have that, look, end of June would be probably a date that would push the following push the project out. We've got a lot of support in getting those approvals through, and it's gone pretty well so far. I'm being fairly optimistic on the fact that it's probably gonna be trouble-free. Look, it is possible it could be as long as end of June before we get it. The guys in the planning have counted the end of June as being the date. All going well, and we got it sooner, you know, we would have some good news on first ore on ship.
All right. Appreciate it. Thanks, Chris.
Thank you. Your next question comes from Alex Ren with Credit Suisse. Please go ahead.
Morning, Chris, Mark, and team. Yeah, really good to finally see that deal coming through with Albemarle. Just a couple from me, please. Just looking at the CapEx guidance, could you give us a bit more color or clarification on the, you know, lithium grade CapEx jump? Is that mainly just because of incorporating the downstream JV deposit or some, you know, is there other reasons like inflation, gearing up for Wodgina Train three and four? I'll come back on the second one.
It's incorporating. Hi, Alex. It's Mark. It's incorporating the Wodgina JV or the Australian JV restructure and the expectation that we're gonna be paying $350 million sometime this half.
I mean, the CapEx has jumped, I think rough calculation is like AUD 500 million, versus, you know, the previous guidance, right?
That's Aussie. Yeah.
What's the other part?
$350 is the commitment.
Yeah. Yeah. Converted to, Aussie, right. Yeah.
Yeah.
Got it. Next question is just on the downstream hydroxide part with Albemarle, that Changzhou hydroxide plant will start processing, you know, spodumene from early 2024. Presumably, you know, during the interim, they're mostly processing their own products with some volume reserved for, you know, tolling your share. I guess what I'm trying to ask here is that, you know, does Albemarle have enough tolling capacity allocated to Min, considering the upstream, you know, rapidly ramping up, right? Understandably, your part of the deal is to ship the rock to them. Just wondering if there are any, you know, discussion internally about a potential contingency if they can't accommodate your spodumene volume.
Yeah. Look, they've give us a fairly detailed plan for all of this calendar year. Look, they appear to have all of the capacity locked away that's required. They've been working on this for quite some time. Yeah. We're fairly confident with that.
Yeah, understood. That's great to hear. That's it from me. Thank you.
Thank you. Your next question comes from Matthew Frydman with MST Financial. Please go ahead.
Sure. Thanks. Morning, Chris and Mark. I had two questions. Firstly, I suppose on funding and capital. You've already got a pretty sizable project pipeline, which obviously you've now added the capital for additional conversion capacity. You've probably accelerated your plans in the Perth Basin with taking out Norwest. You know, you're talking about potential offshore mining services projects, you know, among many, many other things. At the end of the half year, and obviously quite high relative to history at 20%, you know, 0.8 times net debt to EBITDA. Wondering, firstly, you know, what are your upper limits around the balance sheet? Where are you willing to take the balance sheet to fund this growth? How does that shape your options for funding going forward?
Hi, Matthew. It's not that long ago, we were over three times gross debt to EBITDA. We've said consistently that we'll invest where we see great opportunities that'll deliver that 20%-25% after-tax return. When we make those decisions, we look closely at payback period. We look at our balance sheet, our capacity. We're comfortable with where the balance sheet is today. We expect the operating cash flow to be strong in this second half and even stronger the following half. We're gonna generate considerable cash from operations. We know that we're investing heavily, but as Chris said, we're doing that to build 30-50-year businesses.
To, you know, to sum up, we're happy to go above three times gross if we see that opportunity. As we've said to our debt investors, we do it where we expect to see it de-lever relatively quickly. Onslow, on completion, will have a fantastic position on the cost curve. We'll generate reasonable earnings from a mining services perspective once that's turned on. All of this is manageable.
Thanks, Mark. Just following up on that, and correct me if I'm wrong, when you did get up to three times net debt to EBITDA, that was followed pretty soon after with a pretty sizable sell down of Wodgina. Is that the type of thing that you'd be considering, you know, post-completion of Onslow or any other project in order to get leverage back to where you want it to be?
I was talking about the three times gross that we just recently went to. In terms of assets, we have no plans today to sell or dispose any of the portfolio. You know, we look at it from a portfolio perspective, and we'll keep monitoring from and reassessing from time to time.
Got it. Thanks, Mark. Secondly, interested in the opportunities that Chris touched on, in terms of offshore for mining services. Understanding obviously you guys won't be able to provide many specifics, but just wondering, you know, how do you think about the commodity spectrum, I guess the jurisdictional challenges or risks? You know, what's attractive? Clearly, MIN has a lot of internal capability in lithium and iron ore. And in terms of jurisdictions, you know, Canada or North America seem to be a pretty low hurdle for Australian companies. Are they the target markets to be thinking about for CSI, or is that off base?
Not exactly tier one countries we're looking at. We think, look, we think certainly the risk is very manageable. Can't say a lot about it at the moment, but it's not. We've always stayed pretty much stuck to Western Australia 'cause we really can get as much growth out of it as we could afford to to turn on. I mean, our size now is getting beyond Western Australia. We've got some of these innovative pieces of kit that we've got are fairly highly sought after. Most of the big miners don't wanna own it or operate it. They see us as being much more nimble. Look, it's, we're gonna put our toe in the water almost certainly and go and do at least one sizable project.
We'll find out. I mean, we do understand too that some of these jurisdictions, I mean, a number of Australian companies have been at them before, and some of them have succeeded and some have failed. I think we have to expand outside of WA sooner or later. If we feel like we can manage the risk, we're gonna give it a shot.
Got it. Thanks, Chris. Do you need to see better margins in order to take on that risk for an offshore project?
Not necessarily. I mean, we're fairly happy. I mean, one of the things that we do really, really well is that we really keep our margins consistent, you know, in good and bad times. Our clients know and customers know that, so they know exactly what service they're gonna get from us. You know, if there's an opportunity to bump our rates up, we just don't do that. We're extremely consistent with it. I mean, our reputation as a very good safe contractor, safe and with our people and safe that we'll always deliver. I mean, that's something that's really important. That's why they want us. I mean, we've gotta provide a service to our customers if we want a long-term relationship and, you know, all that boring stuff that people don't like to hear.
you know, we've gotta be consistent. we've gotta deliver. you just can't rip 'em off. if I've grown the business in that way for 30 years, and, you know, I'll keep doing it.
Understood. Thanks for all the detail, Chris. Thanks also, Mark.
My pleasure. Thanks.
Thank you. Your next question comes from Alexander Papaioanou with Citi. Please go ahead.
Hi, Chris and Mark. Just one from me. Following on from your comments regarding no legacy contracts and no forward contracts for the downstream product in the JV, can you give some more color as to how you envisage pricing and marketing would go going forward, especially given you're in discussions with OEMs? Thanks.
Yeah. Look, we're basically going to market our product based on indices. I mean, we've always done that. I don't like to hedge the dollar. I don't like to hedge our products. My intention is always to have it floating on a couple of the indices that are out there. The indices on lithium have become quite reliable over the last sort of 12 or so months. Not too different to the way we deal with our iron ore.
In terms of discussions with OEMs, is that likely to change the way you deal with marketing?
No, I don't think so. I just don't wanna go and lock in prices because I'd rather it floated. I don't wanna take that risk. I mean, we take the risk on the mining side, and the OEMs will, they'll have to take their risk on the supply-demand curve.
Yep. No worries. Thanks. That's it from me.
Thank you. We'll now move to the webcast questions. Your first question comes from Adrian Prendergast with Morgans Financial. With Wodgina continuing to ramp up smoothly, has it increased your view on where full nameplate capacity sits?
No, no. I think, look, if anything, hard rock mining on a worldwide scale is in its infancy. I think our team are getting to understand different opportunities with the plant. Look, I think there's no doubt there's an opportunity to get the plant to produce more than nameplate. I mean, that's gotta be done in conjunction with, you know, water supply, tails dams, a whole range of things. The mine plan. I mean, the mine planning around lithium mining is very, very different to iron ore. You've gotta know exactly sort of what's out ahead of you, and you've gotta make sure we got that blend coming in right. It's complicated. Look, the answer is that I think there is no doubt these plants will produce more than nameplate.
I also think that train four is likely going to be a bigger version of train one, two, and .
Thank you. Your next question is a phone question from Rahul Anand with Morgan Stanley. Please go ahead.
Hi, Chris, Mark. Thanks for the opportunity. Look, first one, perhaps for you, Chris, just around MARBL. I wanted to understand, obviously you've got now two downstream conversion contracts available, one with Ganfeng and the other Albemarle. Just wanted to understand what some of the other, you know, perhaps covenants, if any, are. I mean, can you go and build conversion capacity, per se, independently without asking either of the two parties? Do they have first right of refusal? Is there any geography involved in any of these contracts? I.e., you know, if you're building a plant, let's say in China, that you have to be with a certain party out of the two?
No.
That's my first question.
Okay. Look, the answer to that is, generally, no. With Ganfeng, no. We have made a commitment jointly with Albemarle, where we want the on exactly where the first 100,000 tons coming out of Wodgina goes, because you simply need to do that to have the planning and the build and the capital. Beyond that, we're looking together on where to build the next plant, but we're not committed that we have to build it together. For example, if we do a study on building one in Wodgina and one wants to build it there and one doesn't, then one can do it independently of the other.
Is there a first right of refusal in terms of you building that plant, or you can do that without asking them, basically?
No. No. What we want to do is we wanna be good JV partners, and we wanna work together wherever we can. I mean, that's our first objective. If one decides that it's better that they build a plant, I don't know, in the States and we wanna build at Wodgina, we have the right to sit down, have that conversation, and then for us to go ahead and build where we want.
Understood. Okay. Just one follow-up there, Chris. In terms of the Chinese plant, is it fair to think that your marketing team's gonna target the domestic Chinese market for that product and some of the other Western suppliers, perhaps are gonna look to build co-conversion capacity outside China, like we're seeing in the industry?
I think, yeah. Look, generally speaking, yes. I think you're right on both of those. In saying that too, I mean, there's equal opportunity for us to be able to market that product outside of China as well. Both of them have sorta got hooks and barbs with them. When you send product out of China, you're subject to a VAT. When you sell it internally, then, you know, it's a process to get the cash out. I mean, we'll be looking for a number of reasons to balance those sales as well, for some of it to do with cash flow.
Understood. Okay, and one for Mark, please. Mark, just wanted to follow up on that debt question a bit. Can you maybe perhaps help us understand some of the covenants around the debt that currently exists? I mean, where can you take the balance sheet to, perhaps in terms of net debt to EBITDA gearing, interest cover? Like, what type of metrics should we be looking at, and, you know, be making informed decisions around, you know, any sort of commodity volatility and how that might impact the balance sheet? Thanks.
Hi, Rahul. We have a senior facility which is undrawn, which is effectively an AUD 400 million line, which has traditional sort of debt type covenants. The bonds that we have in place, the key issue is that we pay the interest. If we pay the interest, we're okay. There are other restrictions in terms of dividends and so on. They cap the ability to pay dividends in certain circumstances and so on. You know, if we start to have problems with the interest payment, basically. That's it. One of the attractions of the debt package that we've got in place is the flexibility it's given us.
Understood. That's very helpful, both. Thank you very much.
Thanks, Raul.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Ellison for closing remarks.
Okay, thanks. Look, thanks, everyone. Thanks for coming online. Thanks for all your support during the year. We're on a roadshow on Monday, Tuesday at Sydney and Melbourne, so we'll catch up with a lot of yous there, and no doubt you'll have some more questions by then. Look, thanks for coming online today, and thanks for your time, and we'll see yous all shortly. Good morning.