Mineral Resources (ASX:MIN) is on track to meet its revised shipment guidance for the Onslow iron ore project in Western Australia, though rising costs and future capex could weigh on returns, according to a Wednesday note by Jarden Research.

On Wednesday, the company said it lowered its volume guidance for the project between 7.8 million tonnes to 8.0 million tonnes from its previous guidance of 8.5 million tonnes to 8.7 million tonnes.

The revision was due to lower haulage capacity and fewer daily haulage cycles than initially expected, the company said.

However, long-term operating cost guidance at nameplate capacity was lifted to AU$49 per wet metric tonne, up 22.5% from initial guidance, Jarden noted.

Jarden believes that costs are expected to stay elevated into early fiscal year 2026 as in-house haulage replaces contractors.

A wet plant, likely needed by fiscal 2028-2029, could cost in the range of AU$200 million to AU$ 400 million, with further capital expenditure possible if more ore requires processing.

Jarden has a sell rating and an AU$15.5 price target for Mineral Resources.

Shares of the company rose 1% in recent Thursday trade.