Commodities, Finance, Lithium, News, Nickel

IGO sitting pretty as lithium price soars

IGO

IGO took advantage of the buoyant lithium market in the first quarter of 2022 as spodumene concentrate was sold at a 200 per cent premium from its Greenbushes joint venture project in Western Australia.

The Greenbushes product sales price increased from $US592 ($837) per tonne (t) FOB (free on board) for the first half of the 2022 financial year to $US1770 ($2502)/t FOB for the three months to March 31.

Despite this, the operation’s cost of goods sold (COGS) jumped from $388/t of spodumene sold in the December quarter of 2021 to $476/t for the most recent quarter. This fell outside the FY22 COGS guidance of $350-$400/t.

Greenbushes, which IGO shares a 51 per cent stake in with Tianqi Lithium Corporation (Albemarle Corporation owns the remaining 49 per cent), produced approximately 270,000 tonnes of spodumene concentrate for the quarter, a slight increase from the 259,000 tonnes produced the quarter prior.

IGO’s wholly owned Nova operation in Western Australia produced 6290 tonnes of nickel in the first quarter of 2022, amounting to 20,166 tonnes of nickel produced across FY22’s three quarters so far (guidance: 18,750-20,250 tonnes).

The operation produced 2762 tonnes of copper and 237 tonnes of cobalt in the three months to March 31, both achieving their respective year-to-date guidance.

The strong performances from Greenbushes and Nova amounted to IGO enjoying a 154 per cent increase in profit after tax, jumping from $52.3 million to $133 million for the most recent quarter.

“Nova reported another safe and strong quarter with metal production remaining in line with guidance, while cash costs continue to be better than guidance as a result of higher by-product metal prices,” IGO managing director and chief executive officer Peter Bradford said.

“In addition, the strength in the nickel price has generated strong free cash flow from Nova, which continues to underpin our clean energy metals business.

“We also made good progress across our lithium business. At Greenbushes, construction of the tailings retreatment project was successfully completed, with commissioning progressing well.

“The next stage of expansion at Greenbushes, construction of CGP3 (chemical grade plant three), is being progressed.”

In April, IGO amended its proposal to acquire Western Areas, recognising the nickel landscape has changed since the offer was first announced in December 2021.

The miner increased its bid from $3.36 per share to $3.87 per share, with nickel prices spiking since the initial announcement and Western Areas enjoying improved performance as a result.

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