MinRes Cuts 110 Jobs as Lucky Bay Garnet Mine Collapses, Costing $260M

Mineral Resources (MinRes) has axed 110 jobs after pulling the plug on the Lucky Bay garnet operations, a mine owned by Resource Development Group (RDG). The collapse has cost MinRes at least $260 million.

Andrew Ellison, brother of MinRes billionaire founder Chris Ellison, was paid almost $1 million annually as RDG's CEO—a sum that angered minority shareholders, whose investments were wiped out when MinRes refused further interest-free credit.

The funding withdrawal came amid scrutiny over MinRes's related-party transactions involving family members. Voluntary administrator McGrathNicol estimated RDG was burning through $2.2 million a week before its collapse.

RDG listed on the ASX in 2011 at 20¢ per share but never fulfilled its promise. MinRes owned a majority stake before the collapse. Minority shareholders considered legal action but nothing has eventuated.

MinRes cited the Middle East conflict as a major factor, as it significantly impacted Lucky Bay's sales. Combined with higher diesel and shipping costs, a strategic review determined it was best to cease operations and transition to care and maintenance. MinRes will assess options including a potential divestment.

About 110 RDG staff have been axed, with MinRes offering alternative work where possible. The mine will close on July 1. MinRes shares fell 3.1% to $63.84.