Mineral Resources (MinRes) has responded to recent reports it was considering spinning out its lithium business, neither confirming nor denying any such discussions.
The Australian Financial Review reported MinRes was mulling a move to spin off and list its lithium arm in the US, with JPMorgan working on the plan.
The AFR suggested that the board had yet to approve the move but was enticed by the notion given the difference in the value of its shares and other US-listed lithium companies, including Albemarle Corporation.
Albemarle was trading at $US299.85 ($438.17) on the New York Stock Exchange at close on September 9. MinRes’ share price was $73.27 at 3:30pm AEST on September 12.
In response to the AFR article, MinRes said “in the normal course of business, it regularly evaluates various strategic options to maximise value creation for shareholders, including in relation to its lithium business”.
“At this stage, any previously undisclosed potential strategic initiatives being considered by MinRes are not sufficiently advanced or certain to warrant disclosure,” the company said in a statement.
The 2021–22 financial year (FY22) saw MinRes enjoy its second-best annual result in the company’s history, with lithium growth considered one of its four key pillars.
While MinRes’ FY22 underlying net profit of $400 million represented a 64 per cent drop on the previous year, the company said it experienced “a strong second half performance” due to record lithium prices.
MinRes sold 464,000 dry metric tonnes (dmt) of spodumene concentrate in FY22, four per cent lower than FY21 due to lower yields at its Mt Marion lithium operation in Western Australia.
Despite this, MinRes generated $566 million of revenue from spodumene concentrate sales in FY22, which was 336 per cent higher than FY21 ($130 million).
Mt Marion sold spodumene concentrate for $US1733/dmt during FY22, a 329 per cent rise from FY21.