IGO lithium hydroxide refinery faces hurdles as Greenbushes lifts spodumene output

IGO

IGO lithium hydroxide refinery performance weighed on fiscal results despite a group profit. IGO lithium hydroxide refinery output rose year on year, but remained below guidance. As a result, management flagged more impairments and a cautious production outlook.

Kwinana update: IGO lithium hydroxide refinery under pressure

IGO reported a A$62.3mn profit for FY2024-25. However, the IGO lithium hydroxide refinery at Kwinana lost A$28.7mn. Equipment failures kept April–June production well below nameplate. Quarterly output reached 2,126t, up 60pc year on year. Full-year lithium hydroxide totaled 6,782t, almost doubling last year. Management expects further impairments of A$70–90mn for its 49pc JV stake. An earlier write-down of A$524.6mn already reduced the asset’s value. Train 2 construction remains halted while options are reviewed.

Upstream strength: Greenbushes delivers, Nova trims guidance

Greenbushes lifted second-quarter spodumene output to 340,203t, up 2.4pc on the year. Full-year production reached ~1.48mn t, within 1.35–1.55mn t guidance. Site cash costs averaged A$325/t in FY2024-25, with A$366/t in April–June. Spodumene sales rose 12pc on the quarter to ~411,855t after port delays eased. Guidance for FY2025-26 is 1.5–1.65mn t, with a third chemical grade plant due by late 2025. That plant could add up to 500,000 t/yr of concentrate. Nova produced 5,107t of nickel in April–June and 16,371t for the year. Next year’s guidance targets 15,000–18,000t nickel and 600–700t cobalt.

The downstream landscape in Kwinana is tightening. Covalent Lithium completed its 50,000 t/yr refinery, underscoring competitive pressure. Meanwhile, CEO Ivan Vella emphasized focus on Greenbushes with partners Tianqi Lithium and Albemarle. IGO guided 9,000–11,000t of lithium hydroxide for FY2025-26, reflecting operational caution. Therefore, the path to stable downstream margins remains challenging.

The Metalnomist Commentary

Kwinana’s setbacks confirm how hard first-wave hydroxide plants must fight for reliability. Upstream strength at Greenbushes helps cushion earnings, but downstream scale and uptime will decide value capture. Watch the Train 1 impairment, Train 2 timing, and IGO’s offtake strategy as prices and unit costs converge.