Fitch Ratings has revised the outlook on Mineral Resources (MinRes) from 'negative' to 'stable', citing a sharp expected improvement in the group’s leverage position following its agreement to sell a 15% interest in its Wodgina and Mt Marion lithium assets to Posco Holdings.

The agency affirmed MinRes’ long-term issuer default rating at ‘BB-’, noting that the transaction – valued at $765-million and expected to complete in the first half of 2026 – will materially reduce the company’s debt and widen its rating headroom.

Fitch estimates that MinRes’ earnings before interest, taxes, depreciation and amortisation (Ebitda) net leverage will fall to 2.7 times in the 2026 financial year, from 7.7 times in the 2025 financial year, as the group applies the sale proceeds to debt reduction.

While the disposal trims MinRes’ exposure to lithium, Fitch expects only a modest impact on earnings because of weak spodumene pricing. The agency forecasts a 5% decline in Ebitda from the loss of 15% offtake, offset in part by the company’s retained 35% stake and operational control at both mines.

At the same time, the rating case highlights the growing contribution of the Onslow iron-ore project, which has reached 35-million tonnes a year and is expected to meet its 2026 financial year guidance of 30-million to 33-million tonnes a year following haulage road upgrades. Production is forecast to climb to 38-million tonnes a year in 2027 as additional transhippers arrive.

Fitch projects that Onslow will deliver around A$1-billion a year in incremental Ebitda between the 2026 and 2029 financial years, supported by mining-services fees and haulage toll revenue from the company’s road trust. A further A$750-million in carry-loan repayments from joint venture partners is expected over the same period.

The agency also notes MinRes’ reduced capital expenditure programme – dropping to A$1.1-billion in 2026 from A$3.4-billion in 2024 – and expects the company to maintain capital allocation discipline despite resuming growth once deleveraging is achieved.

Fitch continues to factor governance shortcomings into MinRes’ rating but acknowledges steps taken to strengthen oversight, including board changes and enhanced processes for related-party transactions and disclosure.

A potential upgrade was not expected in the next 12 months. Fitch said it would consider positive action once governance risks eased and MinRes demonstrated sustained Ebitda net leverage below 3.0 times.

MinRes ended June 2025 with A$412-million in cash and A$705-million in undrawn revolvers. Recent bond issuance has refinanced $700-million in notes maturing in 2027. The $400-million iron-ore prepayment facility remains treated as debt within Fitch's metrics.