Mineral Resources (ASX: MIN) Nearly Triples in 6 Months: Buy the Momentum or Sell the Rally?

Mineral Resources (ASX: MIN) has staged one of the most dramatic comebacks on the ASX this year, surging 245% from its April lows of around $14 to trade near $49 today. For investors watching the resources sector, this recovery raises a critical question: Is this the start of a sustainable rebound, or have the gains already been priced in the good news?
The rally comes after a brutal period that saw MIN plunge approximately 80% from its January 2023 peak of $96, driven by collapsing lithium prices and governance concerns. Now, with a $1.2 billion lithium deal signed and iron ore operations ramping up, we believe the investment case looks fundamentally different from how it did six months ago.

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POSCO Deal Transforms the Balance Sheet From Crisis to Opportunity

Here’s why MIN’s recent strength matters: the company signed a binding agreement with South Korean conglomerate POSCO, which will acquire a 30% stake in Mineral Resources’ Wodgina and Mt Marion lithium assets for $1.2 billion. This isn’t just another partnership announcement; it fundamentally reshapes the financial position.
The deal directly addresses MIN’s biggest vulnerability: crushing debt levels. As of 30 September 2025, the company carried a net debt of $5.4 billion. That may sound abstract, so here’s what it means in simple terms: MIN was leveraged at 5.9 times EBITDA, a level that raised real questions about whether the company could survive if commodity prices stayed weak.

Post-deal, that picture changes dramatically:

• Net debt drops to $4.2 billion (down $1.2 billion immediately)
• Leverage falls to 2.4 times by FY27 (based on Bell Potter estimates)
• Refinancing risk essentially eliminated at more manageable debt levels

Put simply: at 5.9x leverage, MIN faced existential risk. At 2.4x, the company can comfortably service debt and invest in growth. For context, pure-play lithium producers like Pilbara Minerals carry zero net debt, while diversified miners like South32 sit around 0.5x. MIN’s post-deal position of 2.4x isn’t pristine, but it’s sustainable, and that’s the key shift.
This suggests MIN’s 450,000 tonnes per annum of offline spodumene capacity becomes real optionality rather than a stranded asset. If lithium prices recover even modestly, bringing that production back online becomes profitable rather than cash-burning.

Iron Ore Becomes the Unsung Hero While Lithium Recovers

While lithium dominates the headlines, we believe MIN’s iron ore division is the stability anchor making this turnaround possible. The company’s new Onslow project is ramping towards 17-18 million tonnes in annual shipments. With iron ore prices holding around $100 per tonne, this generates predictable cash flow when MIN needs it most.
What makes this significant is the diversification advantage. Unlike pure-play lithium producers bleeding cash through the downturn, MIN can fund operations and service debt from iron ore while waiting for lithium markets to stabilise. Management’s decision to allocate $500 million of its $1.1 billion capex budget to iron ore rather than lithium demonstrates this pragmatic shift in priorities.

The Investor’s Takeaway

Mineral Resources sits at a critical juncture. The stock has climbed 40% year-to-date, nearly tripling from April lows. Bell Potter maintains a buy rating with a $59 price target, implying 15% upside from current levels. The broker’s confidence stems from accelerating deleveraging and MIN’s positioning to benefit when lithium markets recover.

However, the risks remain substantial:

• $904 million net loss in FY25 (largely impairments on lithium assets)
• Lithium prices are still 80% below 2022 peaks with ongoing oversupply
• The consensus analyst target of $36 sits well below the current $49 price

For risk-tolerant growth investors, MIN offers leveraged exposure to a potential lithium recovery, backed by stable iron ore cash flows and a meaningfully improved balance sheet. The POSCO deal removes the existential concerns that plagued the stock earlier this year.
But for value investors seeking immediate profitability, we believe waiting for clearer signs of sustainable earnings makes more sense. The comeback is real, but it’s sustainable if commodity prices cooperate over the next 12-18 months.