The Mineral Resources Ltd (ASX: MIN) share price suffered in May 2023, dropping by 3.9%, which was worse than the 3% drop for the S&P/ASX 200 Index (ASX: XJO).
Mineral Resources is one of the larger ASX mining shares, with a market capitalisation of $13 billion according to the ASX.
Market thoughts on the business and its share price can shift significantly as commodity prices change. Mineral Resources offers mining services, but it's also involved in mining iron ore and lithium.
If the resource price goes up then it largely adds to the net profit because the costs don't change much month to month. But, if commodity prices go down then the fall in revenue translates into a larger fall in net profit.
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Iron ore price drops
At the start of May 2023, the iron ore price was valued at around US$105 per tonne. But, over the month it fell to around US$100 per tonne.
However, the lithium price actually increased over the month. This may have helped the business perform better than other iron ore miners such as the BHP Group Ltd (ASX: BHP) share price which fell by 5.4% over May.
In the FY23 half-year result, Mineral Resources revealed that the iron ore division only made $37 million of underlying earnings before interest, tax, depreciation and amortisation (EBITDA). In comparison, the lithium segment produced $756 million of underlying EBITDA, so perhaps investors should be more focused on the recovery and growth for the lithium segment.
But, that wasn't the only thing that may have impacted the Mineral Resources share price.
Compulsory acquisition of Norwest shares
At the start of the month, the ASX mining share announced that it had acquired an interest of more than 90% of Norwest. The company said that it was going to compulsorily acquire the remaining Norwest shares. This acquisition was completed in early June.
Norwest is/was the junior joint venture partner in the Lockyer gas field. Mineral Resources is also working on expansion into the energy industry.
Foolish takeaway
Since the start of the year, Mineral Resources shares have dropped 7.5%, while the ASX 200 has gone up almost 3%. So, in the year to date, Mineral Resources shares have underperformed.
