Fifth Road Truck Crash Raises Safety Concerns for Mineral Resources
Mineral Resources (MinRes) reported a fifth road train accident Saturday night on its private Onslow Iron haul road in Western Australia’s Pilbara region. The incident occurred on Saturday night when a multi-trailer truck transporting iron ore overturned. This event raises further concerns about the safety of MinRes’s haulage operations, following four similar accidents between August and November last year.
MinRes’ Chief Executive of Mining Services, Mike Grey, had recently stated: “We haven’t seen another incident [on the Onslow haul road since November] and nor should we.” However, this latest rollover contradicts that statement, highlighting ongoing safety risks.
The haul road is critical to MinRes’ operations, enabling the transportation of iron ore from its mines to port. Each truck carries up to 330 tonnes of ore, making the road a vital component of the company’s cash flow. MinRes is facing financial pressure, with its debt soaring to $5.1 billion due to investments in its $3 billion Onslow Iron project and a downturn in lithium prices.
Of the five crashes, two occurred on the main haul road, while three took place on network side roads. The road has also suffered damage from a cyclone that dumped a month’s worth of rain within 24 hours, which Grey described as “a bloody unusual rain event.”
MinRes confirmed that the latest accident happened at 10 p.m. on Saturday. Haulage had been temporarily paused as a precaution due to a dust storm. When operations resumed, a road train that had been partially pulled onto the shoulder became stranded and overturned. Fortunately, no injuries were reported, and the trailers have since been recovered. The incident has been reported to Western Australia’s Department of Energy, Mines, Industry Regulation and Safety.
To strengthen its financial position, MinRes sold a 49% stake in the 147-kilometre private haul road to Morgan Stanley Infrastructure Partners for $1.1 billion. An additional $200 million payment is contingent on the road reaching its planned capacity by 2026.
As both the owner and operator of the haul road and Onslow port, MinRes collects fees based on iron ore volumes transported through its infrastructure, regardless of ownership of the ore.
Following before accidents between August and November, MinRes Chief Financial Officer Mark Wilson agreed that operator error was a factor. Since then, the corporation has carried out several safety measures, including enhanced driver training, improved road design, better signage, and clearer lane boundaries. Despite these measures, there are still concerns regarding road safety.
During last week’s earnings call, Jarden mining analyst Ben Lyons questioned whether the haul road design or the trailer’s centre of gravity could be contributing factors to the rollovers.
This current setback adds to MinRes’ troubles, with an ongoing inquiry into its managing director and successful founder, Chris Ellison. The Australian Securities and Investments Commission (ASIC) is looking into Ellison for corporate misconduct after The Australian Financial Review accused him and other executives of an offshore tax evasion scheme.
Despite these challenges, MinRes shares saw a 2.5% increase on Thursday, closing at $35.34.
