IGO Caps FY26 with Strong Production, Safety Gains and Nova Divestment

Safety Milestone and Operational Resilience

IGO Limited (ASX:IGO) wrapped up FY26 with a marked improvement in safety, operational output, and financial strength. The company’s Total Recordable Injury Frequency Rate (TRIFR) plunged 63% over the year to 3.7, with zero recordable injuries recorded in the five months to June and over 200 days without a recordable injury. This safety turnaround underscores a maturing risk management culture and disciplined frontline leadership, even as joint venture operations at Greenbushes and Kwinana remain a focus area for further improvement.

Greenbushes Delivers Despite CGP3 Fire Disruption

Greenbushes lithium mine, operated via the Tianqi Lithium Energy Australia joint venture (TLEA), boosted spodumene production by 10% to 387,000 tonnes in the June quarter. This was driven largely by the ramp-up of the Chemical Grade Plant 3 (CGP3), which contributed 71,000 tonnes before a fire in early June forced a seven-week shutdown. Production is expected to resume imminently. The realised spodumene price surged 37% quarter-on-quarter to US$2,286 per tonne, helping Greenbushes achieve an impressive 80% EBITDA margin for the quarter. Windfield Holdings, which owns Talison Lithium, paid a A$390 million dividend to shareholders, reflecting strong cash flow generation despite the disruption.

Kwinana Refinery Impacted by Planned Shutdown

The Kwinana lithium hydroxide refinery faced a major planned shutdown during the quarter, slashing production to 897 tonnes, just 15% of nameplate capacity, and pushing conversion costs to A$40,670 per tonne. A further shutdown is scheduled in July/August to commission a calciner off-gas treatment system, which will further reduce production in the September quarter. This weighed on the refinery’s EBITDA, resulting in an A$88 million loss for the quarter (100% basis), including a significant negative inventory adjustment. Despite this, FY27 guidance anticipates a rebound with production of 9,000 to 11,000 tonnes and conversion costs expected to normalise between A$16,000 and A$18,000 per tonne.

Nova Operation Exceeds Guidance Ahead of Divestment

Nova’s nickel and copper operation delivered a strong finish to FY26, exceeding life of mine (LOM) production guidance and operating below cost expectations. Nickel production reached 15,304 tonnes for the year, with cash costs at A$4.74 per pound nickel payable. Copper sales surged 79% quarter-on-quarter, boosting sales revenue 18% to A$141 million. However, underlying EBITDA for the quarter halved to A$31 million due to year-end adjustments including increased rehabilitation provisions and redundancy costs tied to the mine’s scheduled closure in December 2026. Post-quarter, IGO announced the divestment of Nova to Global Lithium Resources Limited, with the transaction to take effect after mining concludes. This move aligns with IGO’s portfolio optimisation strategy, focusing resources on core lithium and copper assets.

Financial Strength and FY27 Outlook

Group underlying EBITDA held steady at A$118 million, slightly down from the prior quarter, while underlying free cash flow nearly doubled to A$69.5 million. Net cash climbed 18% to a robust A$386.5 million, reflecting strong operational cash generation despite capital investments and the CGP3 disruption. The company’s FY27 guidance anticipates spodumene production rising to 1.55–1.75 million tonnes at Greenbushes with lower cash costs, and lithium hydroxide output at Kwinana increasing to 9,000–11,000 tonnes. Capital expenditure is expected to moderate, with A$250–300 million earmarked for Greenbushes and A$75–90 million for Kwinana sustaining and improvement projects.

Growth Initiatives and Portfolio Discipline

IGO continues to advance its growth agenda through disciplined exploration, proprietary BioHeap™ copper leaching technology development, and selective M&A. The company recently completed acquisition of full ownership of the Copper Wolf project in Arizona and is actively exploring multiple lithium and copper prospects across Australia and the US. BioHeap™, originally developed for nickel, is being repositioned for copper extraction from low-grade sulphide ores, potentially unlocking stranded resources. Meanwhile, portfolio optimisation remains a priority, with divestments of Forrestania and Nova reflecting a sharper focus on core assets aligned to the energy transition.

Corporate Changes and Governance

On the corporate front, non-executive director Debra Bakker resigned after a decade of service, including key committee leadership roles. Ian Rowe was appointed interim CFO, bringing extensive financial expertise, while Alastair McDonald joined as joint company secretary. These appointments aim to strengthen governance as IGO navigates its transition toward a leaner, more focused portfolio.