Australian miner IGO experienced a significant decline in underlying quarterly earnings, attributing it to weaker lithium prices and lower nickel output. In the three months through September, their fiscal first quarter, underlying earnings before interest, taxes, depreciation, and amortization totaled 362.2 million Australian dollars (US$229.5 million). This represents a 42% decrease from the final quarter of fiscal 2023, which saw earnings of A$619.7 million.
Although IGO managed to increase their output of lithium-rich spodumene concentrate and reduce production costs, the average realized price for spodumene sales declined. In the previous quarter, the price stood at US$5,431 per metric ton, while it dropped to US$3,740 per metric ton in the current quarter.
Acting Chief Executive Officer Matt Dusci acknowledged the recent volatility in the lithium market and its impact on industry participants. He stated that managing surplus volumes and deferring some product shipments will help mitigate the effects on operations. However, IGO anticipates that spodumene sales from Greenbushes in the December quarter will be lower than production.
In addition to the challenges faced by their lithium operations, difficult operating conditions at IGO’s Nova and Forrestania nickel operations adversely affected production rates. This contributed to a 25% decrease in nickel output quarter-on-quarter and a 48% increase in costs.
Overall, IGO is navigating a dynamic market environment, taking necessary measures to address ongoing challenges and ensuring operational stability.