The Mineral Resources Ltd (ASX: MIN) share price is in the red after the iron ore and lithium producer released a seemingly positive quarterly activities report.
Stock in the S&P/ASX 200 Index (ASX: XJO) mining giant is down 9.17% at $72.99 a share in early trade on Wednesday.
Mineral Resources share price falls amid record lithium shipments
Here are the key takeaways from Mineral Resources' report on the three months to 31 March:
- Iron ore shipments came to 4.5 wet metric tonnes last quarter – up 10% quarter-on-quarter (QoQ)
- Average realised iron ore price lifted 12% to US$109 per dry metric tonne
- Spodumene concentrate shipments reached a quarterly record of 111,000 dry metric tonnes – up 15% QoQ
- Converted 7,666 tonnes of lithium battery chemicals – flat on the prior quarter – with 5,925 tonnes sold — down 14% QoQ
- Average realised lithium battery chemicals revenue (exclusive of China VAT) was US$56,996 a tonne – down 14%
- Production volumes at the company's mining services leg slumped to 52 million tonnes
The company's mining services business saw production volumes fall on the back of the completion of two external mining contracts. Equipment and people were then moved to joint venture projects, where delays in approvals dinted volumes.
But it wasn't all bad. The company secured a new external crushing contract and two new mining contracts, and the extension of an existing hauling contract last quarter.
What else happened last quarter?
Mineral Resources also worked to restructure its MARBL joint venture and investment in lithium conversion assets in China with lithium giant Albemarle last quarter. The Australian part of the restructure is expected to complete this quarter.
The ASX 200 company also continued the expansion of the Mt Marion lithium project. The expansion is currently within budget, with completion expected to begin next month.
Finally, Mineral Resources' off-market all-scrip takeover bid for Norwest Energy NL (ASX: NWE) gained traction last quarter. The mining giant had a 76% hold on the acquisition target as of 30 March. That's since increased to 88%.
What's next?
Notable guidance downgrades are likely weighing on the Mineral Resources share price today.
The company dropped its full-year outlook for its mining services production volume by as much as 12.5% to between 245 million tonnes and 255 million tonnes on the back of last quarter's struggles.
Over at its iron ore business, full-year production is tipped to be in line with prior estimates. However, iron ore free on board (FOB) costs are now forecast to be at the upper end of previous guidance – $65 to $75 a tonne for Utah Point and $85 to $95 a tonne for Yilgarn.
Looking to lithium, volumes at Mt Marion are expected to come in at the lower end of spodumene concentrate guidance – 160,000 to 180,000 dry metric tonnes – and lithium battery chemicals sold guidance – 19 kilotons to 21.3 kilotons. The project's FOB cost guidance has been lifted to between $1,200 and $1,250 per tonne – up from $850 to $900 per tonne.
Mineral Resources share price snapshot
Today's fall included, the Mineral Resources share price has fallen 0.6% so far this year. Though, it's trading 36% higher than it was this time last year.
For comparison, the ASX 200 has risen 5% year to date and is flat year-on-year.
