The Mineral Resources Limited (ASX: MIN) share price is powering ahead on Tuesday following a positive update from the company.
At the time of writing, the mining services company's shares are fetching for $59.64, up 5.63%.
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What did Mineral Resources announce?
Investors are snapping up Mineral Resources shares after the company provided a business update on its lithium portfolio.
In its release, Mineral Resources advised that due to unprecedented demand for lithium products, it will ramp up production. This follows a mutual agreement with its joint venture partners to increase output from the Wodgina and Mt Marion spodumene mines in Western Australia.
As such, Mineral Resources and NYSE-listed Albemarle Corporation will accelerate the resumption of production from Train 2 at Wodgina.
First spodumene concentrate from this train is expected sometime in July this year.
In addition, Mineral Resources is on track to recommence operations at Train 1, with first spodumene concentrate expected next month. Previously, production from this train was forecast to be in the third quarter of 2022.
Each train has a nameplate capacity of 250,000 dry metric tonnes of 6% product.
Both companies will also discuss timings for starting up Train 3 at the end of 2022, and possible construction for train 4. The latter depends on the future state of the global lithium market.
Moving across to Mt Marion, Mineral Resources and its 50/50 joint venture partner Jiangxi Ganfeng Lithium have decided to upgrade the mine's facilities.
Once completed, this is expected to immediately increase Mt Marion's spodumene concentrate production capacity to 600,000 tonnes per annum from this month.
A second stage of expansion could boost capacity to 900,000 tonnes per annum by the end of 2022.
The equivalent number of tonnes will be at a grade of 6%.
Capital expenditure for both stages is expected to be less than $120 million.
What did management say?
Mineral Resources managing director Chris Ellison commented:
For some time now the world has seen extraordinary demand for lithium, driven by the strength of the electric vehicle market. This demand has resulted in a substantial increase in lithium prices, with pricing expected to remain strong for the rest of this decade.
… With a world-class portfolio of highest-quality, long-life lithium assets in a Tier 1 mining jurisdiction, we are well positioned to capitalise on the continued growth of the global electric vehicle market.
Mineral Resources share price snapshot
Adding today's gains, the Mineral Resources share price has surged by more than 54% for investors in the last 12 months
On valuation grounds, Mineral Resources presides a market capitalisation of roughly $11.2 billion, with approximately 188.85 million shares outstanding.
