‘Low confidence' in Kwinana as IGO left with no choice but to scrub value off ailing lithium refinery
More downtime and equipment failures meant the struggling operation was running at just 35 per cent of its capacity during the quarter and will not meet its targeted production for the year.
IGO also had to fork out another $4.5 million in recent months to sustain the refinery, which still copped an even bigger earnings before interest, tax, depreciation and amortisation loss for the period of $28.7m.
Mr Vella made it clear on Wednesday the miner was
running out of patience
with the operation, though it remained unclear in the results whether IGO and its joint venture partner Hong Kong-listed lithium developer Tianqi would make the call to shut up shop.
After the dire quarter in Kwinana, IGO said another $70m to $90m would need to be scrubbed from the value of its main lithium production unit, meaning the operation will likely be fully impaired on the books for the full year.
It adds to the
$525m erased
from the value of Train 1 in January, when IGO also
called off
plans to build a second processing train at the site due to weak lithium prices.
'Despite the strong commitment from the team at site to address operational problems and ongoing issues, IGO has low confidence in the ability of this asset to achieve meaningful, sustained improvement,' the CEO told the market on Wednesday.
'We continue to work with our JV partner to determine the optimal future pathway for the plant.'
Greenbushes was yet again IGO's saving grace, with the South West lithium mine making sales of 412,000 tonnes of spodumene concentrate for the period, an improvement of 12 per cent on the prior quarter.
Costs and production targets were both within guidance for the full year.
More to come.
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