Australia's IGO flags more pain at Kwinana refinery as annual revenue falls

IGO

30/07/2025 05:22

July 30 (Reuters) - Australian lithium producer IGO IGO.AX posted a drop in its annual sales revenue on Wednesday and flagged an impairment charge tied to its troubled Kwinana lithium refinery in Western Australia.

For the year ended June 30, the Perth-headquartered firm reported a sales revenue of A$512.5 million, lower than the A$822.6 million it reported a year ago.

The impairment charge, a cost that a company logs when one of its owned assets loses its value, could be between A$70 million and A$90 million ($45.6 million–$58.7 million) in fiscal year 2025, IGO said.

Shares of the Australian battery metal producer lost as much as 12% to A$4.40, on track for its worst day since June 1, 2022.

The Kwinana facility 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 has a 49% stake and Tianqi holds the rest.

The refinery, the first lithium hydroxide plant to be built in Australia, has been grappling with operational issues, production delays amid a lithium price slump.

"IGO has low confidence in the ability of this asset to achieve meaningful, sustained improvement. We continue to work with our JV partner to determine the optimal future pathway for the plant," IGO added in its statement.

Some mines that produce lithium, used in electric vehicle batteries, have curtailed operations or delayed expansions after a 90% drop in prices over the last two years.

The refinery, which produces lithium hydroxide, a key material in the batteries, posted an underlying loss of A$28.7 million, despite receiving support from the Western Australian government aimed at bolstering the lithium sector.

Kwinana's full-year production also fell below forecast as operational issues continued to hurt the refinery's output, the company said.

($1 = 1.5347 Australian dollars)

 (Reporting by Rajasik Mukherjee in Bengaluru; Editing by Harikrishnan Nair)

 ((Rajasik.Mukherjee@thomsonreuters.com;))