Mineral Resources (ASX: MIN)
has announced its quarterly activities report, did the revealed numbers show that it’s the best materials business?
Mineral Resources is a mining and mining services business based in Adelaide. Together with its subsidiaries, the company provides a wide range of general mine services, contract crushing, infrastructure provision and recovery of base metals concentrate for export.
Here’s What Mineral Resources Reported
The company said that it has revised its arrangements with Albemarle Corporation (NYSE: ALB) to increase the interest in the Wodgina Lithium Project to be sold to Albemarle from 50% to 60%.
Mineral Resources said that total iron ore shipments were 3.5 million wet metric tonnes (wmt) in this first quarter, which was in line with the previous quarter and up 114% on the prior corresponding quarter in FY19.
Mining operations at Koolyanobbing continued at the targeted rate of 7.5Mt per year in the first quarter of FY20. Mineral Resources said that a fourth rail consist is now operating at full capacity with additional rail capacity to be brought online in the second quarter of FY20 with plans to further increase production to 11Mt per year in an early part of the third quarter of FY20.
In terms of the lithium production, spodumene concentrate production from the Mt Marion Lithium Project in the September 2019 quarter was 28% higher than the previous quarter.
Construction of the Wodgina Lithium Project’s three-stage 750,000 dry metric tonne (dmt) per year plant and infrastructure is almost finished. Train 1 has been commissioned and is producing at design capacity specification at or above 6% grade.
The final part of the update was that the company has finalised the acquisition of the Parker Range Project to increase its iron ore presence in the Yilgarn region of WA.
Is Mineral Resources The Best Commodity Business?
I like that Mineral Resources has two high-demand resources of iron ore and lithium. Having two uncorrelated resources is useful so the company doesn’t have too much of a negative year.
Lithium will hopefully see rising demand in the future from electric vehicles whilst iron ore has high prices right now.
But I try to avoid resource shares because of how little control they have over prices and the limited mine life. That’s why I would prefer to buy the reliable shares in the free report below.
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