Fitch Upgrades Mineral Resources Outlook to Stable Following Lithium Asset Sale
Mineral Resources has secured a credit rating upgrade to ‘BB’ with a stable outlook from Fitch Ratings, driven by a strategic asset sale and a projected contraction in leverage. According to data published by Fitch Ratings, the rating action reflects a sharp anticipated improvement in the Australian mining group’s balance sheet following a $765-million agreement to divest a 15% interest in its Wodgina and Mt Marion lithium assets to Posco Holdings.
Leverage Metrics and Asset Sales
Fitch Ratings estimates that MinRes’ earnings before interest, taxes, depreciation, and amortisation net leverage will fall steeply to 2.7 times in the 2026 financial year. This marks a dramatic recovery from 7.7 times in the 2025 financial year. The primary driver is the application of the Posco transaction proceeds directly toward debt reduction. The deal is slated for completion in the first half of 2026.
While trimming exposure to lithium, the disposal is projected to have only a modest impact on earnings due to prevailing weak spodumene pricing. Fitch forecasts a 5% decline in EBITDA resulting from the loss of 15% offtake. However, MinRes retains a 35% stake and maintains operational control at both mines.
Operational Catalysts and Capital Expenditure
Growth projections are increasingly anchored by the Onslow iron-ore project. The venture has reached 35-million tonnes a year capacity and is on track to meet fiscal 2026 guidance of 30-million to 33-million tonnes annually, aided by critical haulage road upgrades.
Production at Onslow is forecast to climb to 38-million tonnes a year by 2027 as additional transhippers arrive. Fitch projects this initiative will deliver roughly A$1-billion annually in incremental EBITDA between the 2026 and 2029 financial years. This revenue stream is bolstered by mining-services fees and haulage toll collections from the company’s dedicated road trust, alongside an expected A$750-million in carry-loan repayments from joint-venture partners over the same window.
Capital expenditure programs are simultaneously contracting. Outlays are dropping to A$1.1-billion in 2026 from A$3.4-billion in 2024. Fitch notes that MinRes intends to maintain strict capital allocation discipline as it navigates this deleveraging phase.
Governance and Refinancing Milestones
Despite the improved credit profile, Fitch continues to factor historical governance shortcomings into the rating. Yet, the agency explicitly acknowledges remedial steps taken by the board. These include structural board changes and enhanced internal controls governing related-party transactions and disclosures.
Liquidity buffers remain robust. MinRes closed June 2025 holding A$412-million in cash alongside A$705-million in undrawn revolving credit facilities. Recent bond issuances have successfully refinanced $700-million in notes originally maturing in 2027, though a $400-million iron-ore prepayment facility remains classified as debt under Fitch analytical metrics.
A potential future upgrade remains contingent on sustained execution. Fitch indicated that further positive rating action requires both the continued mitigation of governance risks and demonstrated maintenance of EBITDA net leverage below 3.0 times over a sustained operating period.