Mineral Resources: Everything you need to know about the embattled WA miner and founder Chris Ellison

Mineral Resources is arguably the most talked about company in corporate Australia right now, so why is it garnering so much attention? What is Mineral Resources? Mineral Resources, or MinRes as it is commonly known, is a company listed on the Australian Securities Exchange with a value of $7.8 billion and about 7000 employees on its books. Almost all of MinRes’ operations are located in WA. MinRes mines iron ore and lithium, holds ground prospective for oil and gas, and runs a mining services division that has contracts with other companies. MinRes is also notably starting its own airline, which is an industry-first and a move the company says will enable it to transport a legion of fly-in, fly-out workers more efficiently. Who owns MinRes? Like all large ASX-listed companies MinRes has thousands and thousands of shareholders that all own a slice of the pie. But one man owns a bigger slice than everyone else. Chris Ellison founded MinRes, which listed on the ASX in 2006, and he is the company’s largest shareholder with a 11.5 per cent stake. Ellison remains the boss of MinRes — for now — and is credited by many shareholders as the key driving force behind the company’s meteoric rise over the past two decades. Who is Chris Ellison? Ellison is a Kiwi native who moved to Australia in the 1970s with virtually the shirt on his back. Fast forward to today and he owns the most expensive house in Perth — a waterfront Mosman Park mansion bought in 2009 for $57.5m. He is no stranger to media attention thanks to his wealth and outspoken nature, but he’s recently hit the headlines for a more nefarious reason. It was revealed earlier this month that Ellison allegedly ran a tax avoidance scheme in the British Virgin Islands and there have been other claims of financial misconduct levelled against him. The news hit MinRes’ share price hard and the company’s board revealed it had for some time been running its own investigation in Ellison. It was hoped a deal stuck on October 31 could help him survive as boss. What is this deal? Gina Rinehart, Australia’s richest person, agreed to buy virtually all of MinRes’ energy assets for up to $1.13 billion. Analysts say MinRes received a great price and Rinehart said she was looking forward to working with her “friend” Ellison on a joint venture to explore the company’s remaining oil and gas tenements. The deal was not just very important for Ellison, but for MinRes as a whole. Why was the deal important? MinRes has found itself in a tricky financial predicament and sorely needed the cash. The two core commodities it mines and sells — lithium and iron ore — have lost a lot of value in recent months, which has hit the company’s bank balance. Combined with this, MinRes has a large pile of debt associated with the construction bill for its new $3b Onslow Iron mine in WA’s north and in less than three years it has to pay back more than $1b in one go to bondholders. The anxiety around this confluence of factors has seen MinRes’ share price halve since May. The huge network of employees, suppliers and shareholders that MinRes supports locally have a lot riding on how the financial situation unfolds. What did the MinRes board probe conclude? The damning findings of that probe were released on Monday, November 1 — along with the announcement that Ellison would leave the company within 18 months and cop a $18.4 million financial penalty. “There can be no doubt that the actions, decisions and behaviours of Mr Ellison have been profoundly disappointing and require sanction and penalty,” the board said. The report said: He will also pay $1m to charity each year for five years. Chair James McClements will also be gone before the next annual general meeting. Is that the end? No, far from it. The Australian Securities and Investments Commission has launched a formal investigation into allegations of Ellison’s tax dodge scheme. ASIC deputy chair Sarah Court told a Senate committee on Thursday, November 7 it had launched the formal probe after having examined allegations outlined in media reports about Mr Ellison’s financial affairs. Ms Court said ASIC already “has some engagement” with the Australian Taxation Office and “the investigation will follow the normal course”.