The best performer on the ASX 200 on Monday has been the Mineral Resources Limited (ASX: MIN) share price.
In afternoon trade the mining services and production company's shares are up a sizeable 7.5% to $15.39.
Why is the Mineral Resources share price storming higher today?
Investors have been fighting to get hold of the company's shares following the release of an after-hours announcement on Friday evening.
That announcement revealed that it has entered into a binding sale agreement with lithium giant Albemarle.
Under the sale agreement, Albemarle will purchase a 50% interest in the Wodgina Lithium Project for US$1.15 billion. On completion the lithium giant will form a 50:50 unincorporated joint venture with Mineral Resources that will produce spodumene concentrate and lithium hydroxide.
Mineral Resources' managing director, Chris Ellison, appeared to be pleased that things have progressed after signing an exclusivity agreement and commercially agreed key terms with Albemarle on November 21.
He said: "I am extremely pleased we have been able to complete definitive documentation with Albemarle on the sale of a 50% interest in Wodgina and the formation of a 50:50 joint venture."
Before adding: "I am confident that with MRL and Albemarle working together at Wodgina, we will produce and supply high quality, competitively priced lithium products into the market to meet increasing global requirements for these important energy storage products."
Should you invest?
If lithium prices remain favourable then I think Mineral Resources and lithium peers Galaxy Resources Limited (ASX: GXY), Orocobre Limited (ASX: ORE), and Pilbara Minerals Ltd (ASX: PLS) could all prove to be good long term investments.
However, the outlook for lithium prices remains uncertain, with many experts tipping sharp pullbacks due to the potential oversupply of the battery making ingredient.
While I'm optimistic that demand growth will outstrip supply growth, lithium shares are certainly high risk options that may be unsuitable for the average investor.
