June 5 (Reuters) - Mineral Resources said on

Wednesday it had entered a binding agreement to sell a 49%

interest in its Onslow Iron project's dedicated haul road for

A$1.3 billion ($864.24 million) to a Morgan Stanley

infrastructure fund.

The haul road, to be used for transporting iron ore from the

mine site to the Port of Ashburton, "unlocks stranded iron ore

deposits" in the West Pilbara region that would have otherwise

remained undeveloped, the Australian diversified miner said.

The company in January said it expected to introduce a

minority partner for the haul road, which analysts saw as a step

towards liquidity tightening and a positive for the stock.

The sale is expected to complete by the end of this year,

and is subject to finalisation of project conditions and Foreign

Investment Review Board approval, MinRes said on Wednesday.

"The news (of sale) is a vote of confidence in the project

with no doubt extensive due diligence conducted," analysts at

Citi said in a note.

The Onslow Iron Ore Project, a joint venture between MinRes,

giant steelmakers China Baowu, POSCO and Advanced

Micro Controls, carries an initial capital expenditure of A$3

billion.

Shares of MinRes fell 0.6% so far in 2024, after a 9.3% drop

in 2023. The company reported a net debt of A$3.55 billion at

the end of the first half of fiscal 2024, 91% higher than a year

earlier.

"The transaction establishes access to a new pool of capital

to further accelerate our growth and continue to deliver returns

for our shareholders," MinRes Managing Director Chris Ellison

said.

MinRes completed the first ore shipment from the Onslow Iron

project to China Baowu Steel Group ahead of schedule, in May.

The project is forecast to ship around 35 million tonnes of iron

ore a year and an expected mine life of 30 plus years

($1 = 1.5042 Australian dollars)

(Reporting by Ayushman Ojha in Bengaluru; Additional reporting

by Aaditya Govind Rao; Editing by Nivedita Bhattacharjee and

Shinjini Ganguli)