Mineral Resources Lifts FY26 as Lithium Surges
Mineral Resources (ASX:MIN) shares climbed 3.44% to A$64.01 today after the company delivered a strong Q3 FY26 update. Production guidance was lifted across iron ore, lithium, and mining services, and the standout headline was lithium pricing, which jumped 92% during the quarter to US$2,105 per tonne. With shares already up 201% over the past 12 months, the real question for investors is whether there is still more upside to come or whether most of the good news is already in the price.
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Lithium Is Finally Helping, Not Hurting
For nearly two years, MIN’s lithium business has been a drag on profits. Spodumene prices crashed, margins disappeared, and the market started treating Mineral Resources as if their lithium mines barely mattered. That story is now changing in a big way. This quarter, the average price Mineral Resources received for its lithium nearly doubled compared to the previous quarter. With prices recovering and production strong, management felt confident enough to lift FY26 output targets at both Wodgina and Mt Marion.
In simple terms, lithium has gone from being a problem to being a real source of profit again. The combination of higher prices and higher volumes is a powerful one for earnings. We believe this is the most important takeaway from today’s update, because most investors have spent the past 18 months valuing Mineral Resources as basically an iron ore and mining services company. If lithium prices stay strong, that view will need to change.
Iron Ore Holds Up, and Debt Picture Improves
The iron ore side of the business also continues to perform well. Onslow shipped 7.2 million tonnes during the quarter despite weather disruption from cyclones, and full-year guidance was nudged higher. Mining services volumes were also lifted, which suggests demand for MIN’s contracting work remains healthy. Together, these two segments have been quietly carrying the company while lithium recovered.
The other piece of good news was MIN’s successful US$1.3bn bond issue after quarter-end. This was used to refinance more expensive debt, and combined with rising cash flow, it brought net debt down to roughly A$4.5 billion from A$4.9 billion. Mineral Resources has been carrying a heavy debt load through the lithium downturn, so seeing that number move in the right direction is a positive signal for shareholders.
The Investor’s Takeaway
Today’s update is one of MIN’s cleanest in years. Lithium is recovering, iron ore is humming along, and the balance sheet is in better shape. That said, the market has already done a lot of celebrating. With shares up 201% over the past year, valuation is starting to look stretched against where most brokers see fair value, around A$59.
For investors who have already enjoyed the rally, there is no obvious reason to take profits here. For those looking to get in for the first time, patience may pay off. Higher fuel costs are expected in the June quarter, and any market wobble or pullback in lithium pricing could offer a better entry point. The story is intact, but the price you pay matters more than ever.
