The Mineral Resources Limited (ASX: MIN) share price will be on watch on Friday.
This follows the release of an announcement by the mining and mining services company relating to its lithium operations.
Mineral Resources share price amid lithium demerger talk
The Mineral Resources share price will be in focus today after the company responded to media speculation surrounding a potential demerger of its lithium operations.
According to a report by the AFR yesterday, Mineral Resources has appointed JP Morgan to look at unlocking value by spinning off its lithium business in the United States.
This follows a recent restructure which has separated the company's operations into four different units – iron ore, mining services, energy, and lithium.
The company is reportedly considering the move in response to a sizeable valuation gap between its shares and those of US-listed lithium shares such as Albermarle.
The response
This morning the company responded to the speculation by highlighting that it often evaluates various strategic options with the aim of maximising value for shareholders. However, at this stage, it doesn't have anything to report in regard to this lithium demerger speculation.
The company's response stated:
In response to speculation in the Australian Financial Review that Mineral Resources Limited (ASX MIN, MinRes) is considering a potential listing of its lithium business, MinRes wishes to advise that, in the normal course of business, it regularly evaluates various strategic options to maximise value creation for shareholders, including in relation to its lithium business. At this stage, any previously undisclosed potential strategic initiatives being considered by MinRes are not sufficiently advanced or certain to warrant disclosure.
The Mineral Resources share price is up 7% this year. While this is far better than the performance of the ASX 200 index, it isn't as great as the returns being recorded by pureplay lithium shares.
