Major Mineral Resources shareholder L1 Capital supports new chair but silent on Chris Ellison successor

Mineral Resources’ biggest shareholder behind Chris Ellison is keen to see the company get a new chair by the end of June, while seemingly remaining a supporter of Mr Ellison staying on as boss. MinRes has been one of the worst performers for L1 Capital over the past year but the Melbourne-based stock picker is continuing to pour money into its investment. This month its MinRes stake rose from 7.6 per cent to 9.2 per cent, making it the second largest shareholder after Mr Ellison’s 11.5 per cent holding. In November, a month after Mr Ellison’s various indiscretions came to light and he reluctantly agreed to step down as managing director and chief executive by May next year, L1 joint managing director Raphael Lamm said the MinRes founder should stay on as the head honcho. “L1 Capital is supportive of Chris Ellison remaining as CEO with a more appropriate corporate governance structure in place,” he said at the time. L1 received negative publicity for backing Mr Ellison and has since shied away from commenting on the MinRes boss or the company’s corporate governance failures more broadly. On Tuesday, the fund manager said it was supportive of MinRes’ corporate governance overhaul, but stopped short of retracting its backing for Mr Ellison. “From a corporate governance standpoint, the company is making steady progress in its refresh program and we look forward to the announcement of a new chair, expected in the June 2025 quarter,” L1 stated. MinRes has said the person that takes over the chair role from James McClements will be instrumental in picking Mr Ellison’s successor. During February, L1 lost 35 per cent on its MinRes investment, pinning the losses on a three-month delay to the Onslow iron ore project caused by heavy rainfall which badly damaging the haul road connecting the project to port. MinRes will have to spend $300 million fixing the 147km stretch of road. “While the update was disappointing, we believe the share price reaction, which reduced the company’s market capitalisation by more than $2.6 billion, is excessive,” L1 stated. “At current levels we believe Mineral Resources is incredibly undervalued. “While concerns over the company’s balance sheet are valid, we believe its gearing metrics are set to dramatically improve over the next 12 months as the capex hump comes to an end. “Overall, we think the risk-reward at the current share price of around $21 is extremely compelling, with significant upside potential as Mineral Resources executes its key growth projects.” Shares in MinRes were down another 4.1 per cent in early trade on Tuesday amid a widespread market sell-off.