IGO (ASX: IGO) announced it has no confidence in the recovery prospects for the Kwinana lithium hydroxide refinery in Western Australia, owned by Tianqi Lithium Energy Australia (TLEA). CEO Ivan Vella revealed at the company’s annual general meeting on Wednesday that the construction of the second train at Kwinana was suspended in January due to ongoing operational challenges, with Train 1 only achieving 46% of its nameplate capacity.
Despite a reported A$605 million ($393 million) impairment on Kwinana, production increased by 31% to 2,775 tonnes of hydroxide. However, operating losses continued, with an EBITDA loss of A$19.6 million for the quarter. Vella emphasized that high processing costs in Australia make the refinery a “challenged asset,” questioning its economic viability even if lithium prices improve.
In contrast, TLEA’s Greenbushes mine, in partnership with Albemarle, produced 1.48 million tonnes of spodumene concentrate with an EBITDA margin of 66%, showcasing its status as a top-tier lithium asset. Vella highlighted ongoing optimization efforts that could further enhance its operational capacity and efficiency.
