Why the Mineral Resources Limited share price rocketed 13% today

One of the biggest movers on the local market today has been the Mineral Resources Limited (ASX: MIN) share price.

In morning trade the shares of the miner and mining services company have rocketed 13% to $11.20.

What happened?

With no news out of the company since last month, today’s gain is likely to be attributable to a research note out of investment bank Deutsche Bank.

According to the note, its analysts have upgraded the company’s shares to a buy rating and increased their price target from $10.80 to $12.00.

Deutsche appears to have been very impressed with the company’s Wodgina lithium mine in Western Australia following a site visit.

Mineral Resources looks set to become a key player in the industry in the future thanks to Wodgina. By FY 2018 the company is expected to produce 100,000 tonnes per annum according to the report.

Should you invest?

There’s no denying that Mineral Resources has a potentially lucrative asset in Wodgina. This and the expected strong demand for lithium due to the meteoric rise in electric vehicles and energy storage, could make Mineral Resources a good investment option today.

However, my first pick in the industry remains Galaxy Resources Limited (ASX: GXY). I believe its Mt Cattlin mine and Sal de Vida asset in Argentina give it the edge over Mineral Resources and Orocobre Limited (ASX: ORE).

Alternatively, if the resources sector is too high-risk for your liking then these explosive growth shares could be far better options than Mineral Resources in my opinion.

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Motley Fool contributor James Mickleboro owns shares in Galaxy Resources Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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