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Mineral Resources Ltd (ASX:MIN) has been trading up about 6.8% after selling a 49% interest in the soon-to-be-completed Onslow Iron Haul Road in WA’s Pilbara region to investment funds managed by Morgan Stanley Partners (MSIP) for $1,100 million.
According to the arrangement – which will make MSIP partners with Mineral Resources in the Onslow Iron Project – the latter company will receive an additional payment of $200 million from MSIP once the road achieves a 35 million-tonne per annum run rate for any quarter before June 30, 2026.
The company will also retain majority ownership and exclusive rights to use, operate and
maintain the Haul Road, as well as majority exposure to its stable earnings over the life of Onslow Iron.
Importantly, MinRes’s undrawn bridge facility of US$750 million will now be cancelled.
The 150-kilometre Haul Road – which is on-track for completion in October 2024 – links the Ken’s Bore mine site to the Port of Ashburton.
It was developed by Mineral Resources as a key infrastructure solution to aid ‘stranded’ mining projects in the West Pilbara.
Mineral Resources managing director Chris Ellison said the arrangement represented another milestone in the project’s development.
“I’m pleased to officially welcome MSIP as a partner in the Onslow Iron project,” he said.
“This partnership is yet another strong endorsement of Onslow Iron’s world-class credentials and showcases MinRes’ ability to unlock significant capital from our portfolio of assets.”
MinRes has been trading above $41.80 3pm (AEST).
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