Mineral Resources (ASX:MIN) share price slumps 7% on quarterly update

Here's what's weighing on Mineral Resources' stock today…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Mineral Resources Limited (ASX: MIN) share price is plummeting on the back of the company's quarterly report.

Over the first quarter of financial year 2022, Mineral Resources' realised iron ore price represented a realisation of 48% to the Platts average for the quarter.

The company was also negatively affected by COVID-19 travel restrictions over the 3 months ended 30 September.

At the time of writing, the Mineral Resources share price is $39.90, 7% lower than its previous close.

Let's take a closer look at the last quarter for the mining company.

a man in high visibility shirt and hard hat with full beard looks downcast with eyes lowered as though he is disappointed or sad.

Image source: Getty Images

The quarter just been for Mineral Resources

The Mineral Resources share price is sliding despite the company reporting an increase in production.

Mineral Resources' production volumes for the quarter were 7% higher than they were in the previous quarter. They were also 22% higher than those of the first quarter of financial year 2021.

The company produced and shipped 4.6 million dry metric tonnes of iron ore over the period, 40% more than in the prior corresponding quarter. It's currently in line to meet its financial year 2022 guidance of between 21 and 22 metric tonnes.

Mineral Resources' average realised iron ore price for the quarter was US$78.32 per dry metric tonne. It was dragged down by shipments priced on the September Platts price. It also suffered from US$33.8 million of negative adjustments for the finalisation of financial year 2021 shipments.

Additionally, Mineral Resources' 50%-owned Mt Marion lithium project was negatively impacted by rainfall over the quarter.

It produced 99,536 dry metric tonnes of spodumene, 13% less than in the previous period. However, the project is on target to meet its financial year 2022 production guidance of between 450 kilotons and 475 kilotons.

The average realised spodumene price was US$740.6 per dry metric tonne. Shipments of spodumene were also down 54% on those of the prior quarter due to delays.

Finally, the company's operations were negatively affected by COVID-19 restrictions. Unplanned border closures and lockdowns saw the company's staff's movements limited and resulted in a shortage of road haulage drivers.

Exploration and development

Mineral Resources worked on several exploration and development projects over the quarter just been.

Excitingly, it made a significant gas discovery at its 80%-owned Lockyer Deep-1 exploration well over the quarter.

Mineral Resources has also started installing a 1.5-megawatt solar array and battery at the Wonmunna mine site. Right now, the mine's powered by diesel. However, the solar installation will be able to provide around 30% of its energy needs.

The company continued its engineering and detailed design for the Ashburton Project. Mineral Resources is ready to start the project when approvals are obtained.

The company also noted consultations between the Western Australian government, the Pilbara Port Authority, and Port Hedland users of the Port Development Plan continued through the quarter. The company is confident approvals for the development of South West Creek will be granted soon.

Finally, it acquired Red Hill Iron Limited's 40% interest in the Red Hill iron ore joint venture.

Mineral Resources share price snapshot

The quarter just been wasn't a good period for the Mineral Resources share price. It fell 16.6% over the 3 months ended 30 September.

However, the company's stock is currently trading for around 6% more than it was at the start of 2021.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

Miner with thumbs up at a mine.
Resources Shares

Regis Resources delivers record FY26 profit and dividends

Regis Resources delivers record FY26 profit and dividends.

Read more »

An investor sits in front of his laptop looking pensive and concerned.
Earnings Results

MGX Resources narrows FY26 loss as it moves from iron ore to gold

MGX Resources narrowed its loss for FY26 as it completed a successful transition from iron ore to gold and secured…

Read more »

Australian dollar notes in businessman pocket suit, symbolising ex dividend day.
Resources Shares

Genesis Minerals FY26 earnings: profit, growth, maiden dividend

Genesis Minerals doubled EBITDA and paid its maiden dividend in FY26, as profit and cash soared on the back of…

Read more »

Two miners laughing and having fun while using smart phone during their coffee break.
Resources Shares

Medallion Metals bolsters liquidity with $60m placement for production and growth

Medallion Metals lifts liquidity with a $60 million placement to support mine development, processing and growth drilling in Western Australia.

Read more »

Miner looking at a tablet.
Resources Shares

Everything you need to know about the new Fortescue dividend

Fortescue's latest payout is worth checking out.

Read more »

People sit in rollercoaster seats with expressions of fear, terror and exhilaration as it goes into a steep downward descent representing the Novonix share price in FY22
Resources Shares

Why is the Fortescue share price on a rollercoaster today?

Investors have been alternately sending Fortescue shares lower then higher today. But why?

Read more »

A smiling businessman sits at a desk with bags of money, indicating a share price rise after funding has been approved
Resources Shares

Viridis Mining and Minerals secures US$120m equity to fund Colossus project

Viridis Mining and Minerals has secured US$120m in new equity, fully funding the Colossus project’s equity needs.

Read more »

Happy woman miner with her thumb up signalling Wyloo's commitment to back IGO's takeover of Western Areas nickel
Resources Shares

Beacon Minerals posts 325% jump in Lady Ida reserves and outlines big 2026 plans

Beacon Minerals posts a 325% increase in Lady Ida's Iguana Deposit ore reserves with strong cash flow outlook.

Read more »