Lecture Notes: Mining Industry Update

Introduction

• Discussion on Axis Mining Technology's upcoming release and excitement in the industry.
• Overview of mining companies currently facing share price issues and production challenges.

MinReds (Mineral Resources Limited)

• Share price dropped to $31 from highs of $80-90 last year.
• Significant market cap loss for stakeholders like Mr. Ellison.
• Recent earnings call results led to a 30% share price drop.
• Traffic Euro's $400 million deal with MinReds mentioned in specialized reports before mainstream media.

Iron Ore Market

• Iron ore prices declined by $10 per tonne recently.
• Chinese media labeled the recent price bounce as irrational.
• Discussion on MinReds' debt serviceability and market recalibrations.
• Peak net debt to EBITDA ratio forecasted to reach 6.8 times in FY25.

Shareholder and Market Sentiments

• High leverage and cyclical nature of mining posing risks.
• Quotes from market commentators on rapid market downturns.

MinReds Financial Considerations

• Importance of debt serviceability over market capitalization.
• Potential need for capital raising and asset sell-down to address financial challenges.

Arcadium Lithium

• Mount Catlin mine to enter care and maintenance next year.
• Past high valuations and challenges leading to current status.
• Discussion on lithium supply responses in the market.

Metro Mining

• Record bauxite shipments achieved in far north Queensland.
• Overcoming past challenges with freight rates and expanding operations.
• Balance sheet improvements and future guidance.

Wage and Cost Pressures

• Overview of wage trends in the mining industry and their impact on operations.
• Examples of companies navigating these challenges.

Coronado Global Resources

• Recent production downgrade and cost increase at Curra mine.
• Ongoing challenges with Queensland's coal royalties affecting profitability.

Industry Challenges and Opportunities

• General discussion on where to locate mining projects considering environmental and logistical factors.
• Commentary on the cyclical nature of the mining industry and strategic decisions companies might take.