‘Your crystal ball is as good as mine’: IGO chief Ivan Vella ducks on Greenbushes growth, lithium prices

IGO has scraped through 2024 as a profitable business after a litany of writedowns on its nickel and exploration assets, forcing the company to halve its dividend payout for the year. Excluding a $458 million worth of accounting wipeouts against nickel assets Cosmos and Forrestania, and exploration assets Mt Goode and Silver Knight, underlying net profit fell 79 per cent from $1.52 billion last year to $319m. Group nickel production will be reduced to between 16,000t and 18,000t next year after its Cosmos mine was put into care and maintenance amid low prices and the Forrestania operation reaches the end of its life. Its flagship lithium mine and star asset Greenbushes produced 1.38mt for the year and is expected to produce between 1.35mt and 1.55mt in FY2025. IGO has a 25 per cent stake in the Greenbushes lithium operation through a complex partnership arrangement with Talison Lithium and US giant Albemarle. The South West lithium operation is considered by analysts as one of the few Australian mines that can weather the current price storm, with some saying it would still be profitable even if prices for spodumene concentrate fell to about $US420 a tonne, about half the current price of the commodity. But chief executive Ivan Vella wouldn’t divulge demand appetite nor future growth plans for its revered high-grade lithium mine Greenbushes following the battery metals miner’s annus horribilis and a price collapse. Quizzed by Macquarie analyst Rob Stein on whether there was still solid demand for high-grade spodumene concentrate from the operation and how the price collapse was affecting future mine plans, Mr Vella said it was “a great asset” producing “a very sought-after concentrate”. It comes as joint venture partner Albemarle scales back production at its Kemerton lithium hydroxide plant, which uses concentrate from the mine. “I can’t speak for obviously, the product going to Tianqi and Albemarle and their businesses and their situation. All I can say is, obviously Greenbushes is a great asset,” Mr Vella said. “It produces very low costs spodumene concentrate, and that drives a lot of value for all of the joint venture partners. “In terms of the market, looking forward, your crystal ball is as good as mine.” Pushed on whether Greenbushes output would be impacted with this in mind or whether product was fetching a premium, Mr Vella deferred questions to Albemarle. “All I can say is, Greenbushes produces a great concentrate. It’s very valuable for the partnership, and that’s our perspective on it. In terms of . . . pricing again, you know, I can’t really get into that.” In further bids to keep costs down IGO has axed corporate staff and is readying to let go of more. Mr Vella did not disclose on Thursday how much the company was looking to save or how many jobs would go. “We haven’t guided or indicated on the corporate expenses, and I won’t go into it further at this point,” he said. “As we’ve said, we are in the process of reducing that corporate cost, and from multiple angles, there’s an impact on our people, so I’m sensitive to that. “We’ll, we’ll obviously share more on that, that’ll come through in our accounts in due course.” Production at its struggling Kwinana lithium hydroxide operations in Kwinana improved during the year. Refined battery grade product lifted from 1,884t to 3,508t. A major shutdown has been pencilled in for the end of this year to lift output. “The intent is to deal with normal shutdown maintenance and general asset health issues and normal work that’s required, plus a number of changes that help us lift the performance as part of that ramp up,” Mr Vella said. IGO has declared a final FY24 dividend of 26 cents per share, bringing total dividends for FY24 to 37 cents per share compared with 74 cents per share paid last year.