Mineral Resources Founder Ellison Steps Down After Probe, Faces AU$8.8 Million in Penalties

Mineral Resources (ASX:MIN,OTC Pink:MALRF) founder Chris Ellison will step down as managing director at the company after an internal investigation prompted by an October 18 Australian Financial Review report.

The company said in a Monday (November 4) press release that its board will impose AU$8.8 million in financial penalties on Ellison; he will also lose remuneration of up to AU$9.6 million as a result of his actions.

Ellison will continue acting as managing director until a successor is found within the next 12 to 18 months.

"With the interests of shareholders absolutely front and centre, the Board has determined there needs to be an orderly leadership transition, significant strengthening of governance protocols, and a financial penalty imposed on Mr Ellison," said Mineral Resources Chair James McClements, saying that the board is facing a unique situation.

Ellison apologised for his actions, and said he will work with the company on its leadership transition plan.

“I am deeply sorry for the events that have occurred and the impact they have had on MinRes’ reputation. I apologise to the rest of the Board and to our people, who expect and deserve better from me," he said.

"I acknowledge that I made mistakes, some of which were driven by my wish to keep private certain events that cause me great personal embarrassment. I am committed to the leadership succession that the Board has announced, and I will work tirelessly to win back the confidence of investors and our whole MinRes team,” Ellison added in the statement.

Explaining Ellison's infractions, Mineral Resources notes that in 2006 and 2008, the company made payments amounting to AU$3.79 million to Far East Equipment Holdings, a company in which Ellison held an interest. The transactions took place after Mineral Resources completed its initial public offering, and Ellison didn't declare the income.

McClements said he will step down as chair at or before next year’s annual general meeting.

“(My position) was always set for change by the 2025 AGM when I would have served as a director for 10 years,” he explained. “It’s appropriate my successor should be deeply involved in the appointment of the next CEO and, therefore, we will fast track recruitment of the next MinRes Chair through the Nomination Committee.”

The company notes that its decisions were based on an assessment of learnings and appropriate responses considering Mineral Resources’ reputation and impact in the market, along with keeping the business intact.

Company shares have fallen precipitously since October 18, but are also down substantially year-to-date.

In its report for its first fiscal quarter of 2025, Mineral Resources outlines the efforts it is taking to reduce its operating costs and strengthen its balance sheet, saying it has identified about AU$300 million in cost reductions for the year.

The company said on October 31 that it will sell 100 percent of its 368 and 426 exploration permits in the Perth Basin to Hancock Prospecting. The parties will also enter two joint venture deals for Mineral Resources' remaining onshore Perth Basin and Carnarvon Basin exploration acreage. In total, Hancock will pay the firm up to AU$1.13 billion.

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.