Mineral Resources : 2024 Annual General Meeting - Transcript

MinRes Annual General Meeting - Transcription

Kim Collard, Balladong/Wadjuk Elder of the Noongar Nation:

Okay, good morning everybody. My name is Kim Collard and it's my role and responsibility to welcome all here to country. I would like to begin by acknowledging and recognising MRL, Mineral Resources Limited for acknowledging and recognising the traditional custodians whose land we gather upon this morning, the Whadjuk people of the Noongar Nation.

[native language]. My name is Kim Collard and I'm an elder of the Whadjuk community. For those who don't know, Noongar are the people of the southwest of Western Australia, so 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. And as a result of that, we take that responsibility very seriously by placing in the hands of James McClements, the Chair of MRL Board and the Board to look after every need this morning.

[Native transcription] Chairman, Mr. James McClements, MRL. [native language] Other Board members in particular reference to Colleen Hayward, [native transcription], Managing Director, Mr. Chris Ellison, shareholders, other stakeholders, to the 2024 MRL AGM. [native transcription] We are on Whadjuk land. [native transcription] I see to our ancestors, our grandmothers, our grandfather's spirit have travelled this land for thousands and thousands of years and it's attracted our ancestors that we still continue to follow today. [Native transcription], Board member, shareholders, [native transcription] 2024, MRL AGM. To the many leaders, shareholders, other stakeholders. We welcome you here to the MRL AGM.

[Native transcription] I said to you that our God, our creator is the rain that has served the wild. 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 on Noongar country, whilst on Whadjuk country. In conclusion, can I just once again acknowledge MRL for recognising the traditional custodians, Whadjuk people of the Noongar nation. Remembering also that MRL's footprint is also on the lands of [native transcription], Karajarri, [native transcription] 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 the oil industry and mining resources in leading the way in creating business and employment opportunities, and particularly to the Aboriginal business sector and a key for MRL 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, so it's given me a great deal of responsibility to hand it over to James to follow this meeting. Thank you very much.

James McClements, Chair of Mineral Resources Limited:

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 Non-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 in 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

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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's next chapter.

This morning I'm joined on stage by the MinRes Board and senior leaders, so starting on my right, Chris Ellison, MinRes Founder and Managing Director. Independent non-executive directors, Xi Xi, Susan Corlett, Zimi Meka, Colleen Haywood, and Justin Langer AM. Please also welcome our newest Independent Non-Executive Director's 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, so Mike Grey Chief Executive Mining Services, Darren Killeen Chief Executive Engineering and Construction, Chris Soccio Chief Executive Iron Ore, Josh Thurlow Chief Executive Lithium and 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'll be keen to ask questions or make comments during today's proceedings. You'll 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 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 jeopardising 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 interest 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 judgement using 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 practises 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 judgement 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

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established an Independent Ethic and Governance Committee, which will, with independent expert advice, oversee a renewed focus on compliance and a strength and whistleblowing process.

We also focused... 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 believed that our conclusion carefully balanced 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 organisation, 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, 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 rigour of our corporate governance practises 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 result in a strong and comprehensive response from your Board.

A major focus has been understanding Chris' historical private tax matters, along with MinRes' involvement with private companies with which Chris has a connection. To fully understand any impact on MinRes, and your interest 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' conduct and several priority actions supporting our comprehensive response. In making decisions and taking appropriate actions, the Board prioritised 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'll 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 to 18 months.

The Board's announcement on 4th of November also acknowledged how MinRes' rapid growth, particularly over the last five years, has placed pressure on the company's governance systems and

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processes. While work has been ongoing to uplift these systems, we also recognise the need for accelerated change to better reflect MinRes 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 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 Director's Denise McComish as Chair, Susie Corlett, and Jacqui McGill. This Committee's responsibilities include reviewing transactions involving key management personnel and their related parties in enhancing internal controls, overseeing internal and external investigations, coordinating investigations into outstanding matters, and strengthening conflicts of interest procedures. It's 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 whistleblowing protocols, which it will independently overseen. 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 organisation 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 practises and processes while also overseeing the company's whistleblowing processes.

I hope you can see that the Board is committed to strengthening MinRes' governance framework and prioritising 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, peoples, and communities. 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 investigations 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 apologised and deeply regrets the events that have occurred and their impact on MinRes' reputation.

On related party transaction, 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 leases are at arm's length and on commercial terms. Nevertheless, given the feedback from investors around minimising, 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% unitholder, 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' daughter and, Resource Development Group Limited which is 64% owned by MinRes and who's 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.

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Now we're 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 the Independent Non-Executive Director's appointed in December 2023 and January 2024 respectively. Denise brings to our Board outstanding and comprehensive experience across audit risk and corporate governance in the mining energy, financial services and infrastructure sectors. She's a fellow of Chartered Accountants Australia and New Zealand. And in 2018, was recognised 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.

Denise McComish, Independent Non-Executive Director of Mineral Resources Limited:

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. And in that context, I Chair the Audit and Risk Committee and now the Ethics and Governance Committee. So 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 behaviour displayed by those in charge.

Since retiring from KPMG, I've joined a number of boards and I'm 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 Organisation 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've 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, for all of our stakeholders. Thank you for your support.

James McClements:

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 favour of this resolution later in the meeting. Jacqui McGill is a highly credentialed executive and non-executive director within more than 30 years of strategic and operational experience in large-scale operations in the mining and the resources sector. In 2020, Jacqui was recognised 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. Jackie's 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.

Jacqueline McGill, Independent Non-Executive Director of Mineral Resources Limited:

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 onboard. As the Chair has noted, I'm now playing a central role in the process to ensure MinRes has the strongest possible governance

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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, and 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. And those cultures need to be inclusive and diverse to create value. As a Non- Executive Director, I'm member of the Board's 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 Field's Social Ethics and Transformation Committee whose charter is to assist the wider organisation and Board with issues such as ethics, security, labour 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 extraordinary successful 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 organisation 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 very much.

James McClements:

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 are 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 recommend shareholders vote in favour 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 $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

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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.

Chris Ellison, Managing Director of Mineral Resources Limited:

Thanks, James. Much appreciated. This is MinRes' 19th AGM. I've attended all of them and as I look out in the crowd I've got some familiar faces out there. It's good to see you all again, especially over the last four or five years. It's been traditional. I welcome David and Tracy Bowden. They come onboard as Kerry Stokes would say, as the most important contributors to fundraising around Telethon is all of that, mums and dads and kids, the families, and 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 acknowledgments 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 recognise 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. I'm 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 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 judgement error with reporting of personal tax. I later went on to self-report it. Subsequently, I paid the penalties interest in 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 its a dark cloud in my life that I'll live with forever. But regardless, I want everyone to know I deeply regret that error in judgement 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. So 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 know 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 in 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 governments a 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 onboard. 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 of all my capability and energy through to the transition phase and I look forward to doing so. So that's dispensed with that part of it. Again, I say to everybody that's been affected, I'm deeply sorry.

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We're going to show you a short video now to try and bring you into our world and see through our eyes how Onslow Iron has 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 the Project has been lying around up there since probably 2004. There's been more than three quarters of a billion dollars 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 $0.5 million 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 transhippers working. 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 it and I don't think the market really gets it yet.

We've actually built a 35 million tonne 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 companies in the world? And it's iron ore. It's pretty boring. It's pretty easy. It's not like dealing with lithium or copper, but we've got a 35 million tonne 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 ore went onboard in May. Well ahead of time. Focus now is in getting this up to 35 million tonnes.

I won't talk too much about Onslow Iron Project. 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 orebody and we go, "Give us your orebody. We'll bring our innovation. We'll attach 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 mines. 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 levelling 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 a $100 a tonne 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 and quicker succession. Every time we've had a downturn over that period of time, the companies 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.

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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, I won't go through them again. James read them out before. They're down in the front. I encourage you to catch up with them after we finish the formal business. And again, sitting behind our five CEOs, we've got our new leadership team that we've brought up through the business and the director roles.

So Tim Picton, Andrea Chapman and Ivor Jezdik. Ivor, you are here, somewhere? So Director of Strategy and Growth in Tim Picton. Andrea is Director of 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 a Technical Director looking after mainly around strategic exploration and mine planning. So 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'll 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 think we can get anything done to 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 with record earnings in FY '24. And the business is transitioning through to the Onslow Iron and other new projects we've bought onboard. So from early '24 to the end of '25, that business is doubling in revenue, EBITDA and scale. 70% of the contracts we have sitting in there range in the 20 to 50 year range. So that's getting it into an infrastructure type business. We're starting to own rail, 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'll 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 over price. 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 90 cents 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 organisations that have got good orebodies.

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 costs and efficiency. So pulling every dollar out of there that we can in costs and trying to make sure that we have them ticking over

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MinRes Annual General Meeting - Transcription

and we've got them conditioned ready for the upturn and the upturn will come. We're now putting Bald Hill in care and maintenance. You would've read about that. Not a great result, but we have to pull product out of the market, and we have to get the costs down to 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 orebodies down there are thin. We're spread over 200 kilometres from north to south that were 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 the tenements we've got in the Perth Basin with some gas and oil in them to Hancock. 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 that 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 prioritised, safe and supportive environment where our people can thrive.

We're in the top 5% of the mining industry in terms of 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 '24 peaked at 8,500 people. That includes 2,500 to build Onslow.

So 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 in head office for all of those people who are supporting these sites that we're winding down or pulling back on. And Bald Hill, of course, going on with care and maintenance, we're losing about 250 people out of there. So not a good time. I mean, we are here 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. 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 '24. 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 third of the entry level programs that we run in 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 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 but when we go through these turbulent times that we are. 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. And we were testing over 60 mine and oil and gas companies in Western Australia. 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 in

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