It's been a spectacular year for investors in Australia's biggest ASX lithium stocks.
Over the past 12 months, shares in Mineral Resources Ltd (ASX: MIN) have surged around 213%, while PLS Group Ltd (ASX: PLS) has done even better, rocketing approximately 301%.
The rally has been driven by a powerful recovery in the lithium sector after several difficult years.
Momentum has cooled in recent weeks, however. Both stocks have retreated over the past month as lithium prices eased.
That's hardly surprising. Lithium carbonate prices climbed roughly 155% over the past year, providing a major tailwind for producers. But after falling around 14% over the past month, investors are once again questioning how much upside remains.
Even so, anyone who invested $5,000 in either stock a year ago would still be sitting on an eye-catching gain.
Here's what that investment would be worth today.
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$5,000 invested in Mineral Resources
A $5,000 investment in Mineral Resources 12 months ago would now be worth approximately $15,650.
While the company has benefited from the rebound in lithium, it's not a pure-play producer.
Unlike many ASX lithium stocks, Mineral Resources also has sizeable mining services and iron ore operations, giving investors broader commodity exposure.
That diversification has proven to be valuable. The company recently delivered its strongest half-year result on record, reporting revenue of $3.1 billion and EBITDA of $1.2 billion.
A standout contributor was the rapidly expanding Onslow Iron project, which has emerged as a major earnings driver alongside improving lithium market conditions. The growing iron ore business helps reduce Mineral Resources' dependence on lithium alone, making earnings less sensitive to swings in a single commodity.
That doesn't eliminate risk, however. Both iron ore and lithium prices remain important profit drivers, and weakness in either market could weigh on earnings and investor sentiment.
$5,000 invested in PLS Group
The returns have been even more remarkable for PLS Group shareholders.
A $5,000 investment made 12 months ago would now be worth approximately $20,050, effectively quadrupling an investor's original capital.
Unlike some of its peers, PLS' rally hasn't been driven solely by rising lithium prices. The $18 billion mining giant has also delivered impressive operational growth.
In its latest half-year result, the ASX lithium stock reported revenue of $624 million, up 47% from the previous corresponding period as both realised lithium prices and sales volumes increased.
Underlying EBITDA surged 241% to $253 million, while EBITDA margins expanded dramatically to 41%, compared with just 17% a year earlier.
Its flagship Pilgangoora operation remains one of the world's largest hard-rock lithium mines, providing significant scale and cost advantages as global demand for battery materials continues to grow.
Like every lithium producer, though, PLS remains exposed to commodity prices. If lithium continues to weaken, profitability could come under pressure despite strong production growth.
Foolish takeaway
The recent pullback is a timely reminder that ASX lithium stocks remain highly leveraged to commodity prices. That said, the underlying businesses continue to strengthen. Production is rising, earnings have rebounded sharply, and major growth projects are progressing.
If lithium prices stabilise – or resume their upward trend – both Mineral Resources and PLS Group could find fresh momentum.
