Minerals Resources Ltd (ASX: MIN) shares are one of the most interesting ASX mining shares, in my opinion.
The company has a mining services division, an iron ore division, a lithium division and an energy division where there is a gas discovery.
The latest move by Mineral Resources is to invest in ASX lithium share Kali Metals Ltd (ASX: KM1), the latest lithium business to list on the ASX.
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What is Kali Metals?
This ASX small-cap share has 3,854km2 of land across Western Australia, NSW and Victoria, with a large amount located close to existing lithium projects and infrastructure.
Kali Metals has a partner – SQM, a major Chilean producer which is responsible for 19% of the global supply.
The company says it has a "highly accomplished board and management team" who have a background in mining, exploration and project development which "complements lithium industry credentials."
Kali Metals recently revealed that spodumene concentrate, meaning lithium, has been identified at the Spargoville project, which is one of the projects within the Higginsvile lithium district. Ongoing soil sampling programs have been planned to cover all eight projects in 2024. You can read more about that recent news here.
Why Mineral Resources shares could be a safer way to invest in the ASX lithium share
Last week, it was announced that Minerals Resources had taken up a stake of approximately 10% of Kali Metals.
While Kali Metals is an exciting business, it's still in the exploration stage of its operations, so there's a lot of work to do before the ASX lithium share starts mining, let alone makes a profit.
Mineral Resources is an established business with a multi-billion dollar market capitalisation that's already making a lot of profit and has plans to become even more profitable by lifting production. It's a safer choice, and remember that it has its own plans to ramp up lithium production.
However, at this stage, owning 10% of Kali Metals isn't worth that much – its total market capitalisation is $87 million, so the Mineral Resources stake is worth roughly $9 million. Mineral Resources has a market cap of over $12 billion, so the holding is essentially immaterial.
But, if Kali Metals can become a much bigger business, then Mineral Resources can benefit and its stake could grow in value to be worth tens of millions of dollars (or perhaps more).
Minerals Resources share price valuation
With increased production on the horizon, Mineral Resources is set to see profit growth.
According to Commsec, the Minerals Resources share price is valued at under 10 times FY26's estimated earnings with a possible grossed-up dividend yield of 6.1%.
