Mineral Resources Ltd (ASX: MIN) has completed the upgrade of its previously troubled Onslow Iron Haul Road, which has been plagued with trucking incidents over the past year or so.
The company said upgrades to the road, which connects its Onslow iron ore mine in the Pilbara region of Western Australia to the port, had now been safely completed, "enabling unconstrained haulage to resume at normal speeds''.
Roadworks included seal binder upgrades and cement stabilisation to enhance pavement strength and moisture resistance, as well as asphalting along the entire length of the sealed road. Minor ancillary works off the road continue and are scheduled for completion next month.
Mineral Resources said in a statement to the ASX that despite the roadworks, the Onslow Iron operations shipped a record 3.2 million tonnes of ore in August.
Managing director Chris Ellison said Onslow Iron had continued to perform "very strongly" during the upgrade.
The resumption of unconstrained haulage marks another significant milestone as we focus on safely delivering the project's FY26 volume guidance. Onslow Iron is now established as a cash generative, low-cost asset that underpins the deleveraging of our balance sheet while driving stable, long-term growth.
Mineral Resources shares were changing hands for $41.51 on Monday, up 0.5%.
Image source: Getty Images
Upgrade brings saga to an end
RBC Capital Markets analysts said in a note to clients that the haul road news was a positive outcome, but "somewhat expected''.
Importantly, the haul road completion should give further confidence in Mineral Resources receiving the contingent payment and supporting de-gearing efforts over FY26. Over the next 12-24 months we expect Mineral Resources to ramp up Onslow, prioritise the balance sheet, reduce capex and operate the assets for cash flow.
RBC analysts rate Mineral Resources shares as outperform with a price target of $41 per share.
In June last year, Mineral Resources sold a 49% stake in the Onslow Haul Road to Morgan Stanley Infrastructure Partners for expected proceeds of $1.3 billion.
The payment was split into a $1.1 billion upfront payment and a $200 million deferred consideration contingent upon the road achieving a 35 million tonne per annum run rate for any quarter before June 30, 2026.
The road has been plagued by truck rollovers, forcing the company to upgrade the road along its entire 150km length.
Mineral Resources said in February that a detailed technical review found that "no fatal flaws have been identified", and that rectification works would be sufficient to bring the road up to standard.
