ASX-listed resources group IGO has announced that operational challenges continue to plague its Kwinana lithium hydroxide refinery, resulting in full-year production falling short of expectations. The company and its joint venture partners are currently in discussions to determine the best course of action for the refinery to minimise cash outflow. IGO is a diversified mining and exploration company focused on metals critical to clean energy. It explores for, develops, and operates mineral deposits, primarily in Australia.
IGO anticipates a further impairment of between $70 million and $90 million related to the Kwinana refinery assets, which would fully impair train 1. According to IGO chief executive Ivan Vella, the Kwinana lithium hydroxide refinery operated at only 35 per cent of its nameplate capacity during the quarter due to ongoing equipment failures. This resulted in the refinery not achieving its guided production tonnes for the year.
Vella stated that despite the team’s efforts to address the operational issues, IGO has little confidence in the asset’s ability to achieve significant and sustained improvement. The company is collaborating with its joint venture partner to determine the most viable future path for the plant. During the quarter, Kwinana reported an EBITDA loss of $28.7 million, compared to a $19.7 million loss in the third quarter. Lithium hydroxide production for the June quarter totalled 2126 tonnes, representing 35 per cent of the refinery’s nameplate capacity.
