What did IGO tell us about its lithium business in the latest earnings call?

On 30 July, one of the largest hardrock lithium producers, IGO held its June Quarter 2024 earnings call, highlighting its efforts and results in navigating various uncertainties in its lithium operations and the overall market.

Ivan Vella, the CEO, reported that the Greenbushes Lithium Mine achieved full production with quarterly spodumene concentrate output rising 19% quarter-on-quarter (QoQ) to 332k tonnes. Spodumene sales reached 530k tonnes, significantly up from the 183k tonnes in previous quarter. The quarterly average realized price for spodumene was US$1,020 per tonne (FOB Australia). Production cash costs are A$338 per tonne, down 12% comparing with the last quarter, leading to the FY24 cash costs at A$330 per tonne.

In terms of FY25 guidance, IGO anticipates 1.35-1.55 million tonnes of annual production and cash costs between A$320-380 per tonne, both at similar levels considering FY24 actuals and guidance. While on the other hand, the production expects higher upper limit. "There's certainly upside opportunity," said Vella, who also recognized that "the recoveries are still not where they need to be". The company will focus on optimizing existing operations to maximize output before committing to new capital expenditures.

The construction of Greenbushes CGP3 is ongoing. CGP3 will have a processing capacity of 2.4 million tonnes per annum producing up to 500k tonnes per annum of concentrate. Commissioning is expected at the beginning of FY26. Vella acknowledged that Western Australia had seen overall cost inflation and initial project challenges, which affected both schedule and costs.

The Kwinana refinery showed improvement, with lithium hydroxide production increasing by 39% QoQ to 1,331 tonnes. However, further operational enhancements are planned, including a shutdown in Q4 of FY2025 to implement critical modifications to boost performance.

During the call, the management noted market uncertainties, particularly regarding downstream demand fluctuations in China and Western markets, and further expressed confidence towards Greenbushes' advantages in production costs and margins.

Author: Hongqiu Su | Battery Metals Analyst Associate | London Office, Shanghai Metals Market
Email: lilysu@smm.cn