Australia's IGO flags impairment on lithium hydroxide division

IGO

20/01/2025 01:59

Jan 20 (Reuters) - Australia's IGO  IGO.AX  warned of an
additional net loss in its first-half results this year on
Monday, citing a decline in value of its troubled Kwinana
Lithium Hydroxide Refinery, which is grappling with production
delays and a lithium price slump.
    The Kwinana facility in Western Australia is part of the
Tianqi Lithium Energy Australia (TLEA) joint venture between IGO
and China's Tianqi Lithium  002466.SZ , in which the Australian
miner holds 49% and the latter holds a 51% stake.
    Lithium hydroxide, the primary product of the refinery, is a
key component in electric vehicle batteries.
    IGO's expected impairment on its lithium business comes on
the heels of previous writedowns on its nickel operations, which
have prompted a strategic review to reassess its resources amid
a global nickel market oversupply that drove prices down last
year.
    TLEA is contending with an accumulation of lithium hydroxide
inventory at Kwinana due to falling prices and subdued demand
for the metal.
    IGO stated it is currently assessing the worth of Kwinana,
with the final impairment value yet to be determined.
    At the same time, Tianqi Lithium confirmed it is in
discussions with TLEA's management to verify information.
    However, no conclusions have been reached regarding the
assumptions and results of the impairment charge, according to a
separate statement from the company.

 (Reporting by Roushni Nair in Bengaluru; Editing by Rashmi
Aich)
 ((Roushni.Nair@thomsonreuters.com;))