IGO’s Greenbushes rebound opens a new chapter as Nova winds down

Greenbushes reaches record production as CGP3 hits nameplate

IGO Limited (ASX:IGO) is entering a new phase with its strongest operating asset producing at a record rate. Greenbushes turned out 435kt of spodumene concentrate in the September quarter, 12% more than the previous quarter, while production cash costs fell 7% to A$418 a tonne.

The improvement followed a recovery in Chemical Grade Plant 3, which reached nameplate capacity in September, nine months after first ore commissioning and despite a fire-related interruption in June. The plant’s ramp-up, alongside higher feed grades and improved recoveries, helped lift Greenbushes’ EBITDA margin to 83% from 80%.

The result marks a notable operational contrast with the problems that had clouded the asset earlier in the year. IGO’s previous quarter had included the CGP3 commissioning progress, while the latest report records the plant reaching its stated capacity. However, sales fell 4% to 376kt as port constraints required smaller cargoes and increased concentrate inventory. The realised spodumene price also declined 7% to US$2,130/t.

Nova delivers a strong final quarter before closure

Nova supplied an unusually strong closing act. Nickel production rose 19% to 4,635t and copper production increased 27% to 2,144t, pushing unit cash costs down 55% to A$2.00 per pound of payable nickel. Underlying EBITDA climbed 83% to A$56.1 million, although the prior quarter had been burdened by rehabilitation, redundancy and retention provisions tied to the end of mine life.

Mining and processing are due to conclude in late October, after which the divestment to Global Lithium Resources is expected to complete during the December quarter. IGO said Nova is on track to exceed the upper end of its life-of-mine nickel production guidance and finish below the lower end of its cost guidance, based on the quarter’s performance and unreconciled October results. Those expectations remain subject to the final operating period and transaction timing.

The closure removes a productive cash-generating operation from IGO’s portfolio, even as it simplifies the business. The company’s Nova divestment plan had already been identified as a central part of its FY27 transition. In the September quarter, Nova generated A$66.9 million of free cash flow, with no sustaining capital expenditure recorded.

EBITDA rises while Kwinana remains loss-making

Group underlying EBITDA increased 49% quarter on quarter to A$176.1 million, helped by Nova’s closing contribution and a A$31.9 million mark-to-market gain on listed investments. Underlying free cash flow moved in the opposite direction, falling to A$39.7 million from A$69.5 million, while net cash ended the quarter at A$376.3 million after IGO paid a A$37.9 million final FY26 dividend.

Kwinana remains the less comfortable part of the lithium story. The refinery produced 918t of lithium hydroxide and sold 926t, but recorded a A$65.4 million EBITDA loss. That figure included a A$32.0 million inventory net realisable value adjustment, reflecting higher spodumene feedstock costs and lower lithium hydroxide prices. Conversion costs improved 17% to A$33,677/t, but remain well above FY27 guidance of A$16,000 to A$18,000/t.

Greenbushes review points to opportunity without a valuation yet

Talison has substantially completed the technical work in its Strategic Options Review at Greenbushes. The review identified potential value opportunities in resource and reserve optimisation, mine design, scheduling, recovery and product grade. IGO said realising those opportunities depends partly on water, tailings and port logistics capacity.

Valuation is still being completed and is expected to feed into Talison’s CY27 budget and future plans. That leaves the most strategically interesting part of the update unfinished: the company has identified possible operational improvements, but has not yet quantified their value or set out a detailed long-term plan.

IGO’s next phase is therefore defined by execution rather than a single new project. Greenbushes must sustain its improved performance, Kwinana must reduce its losses, and the Nova handover must proceed as planned. The December quarter should provide the first test of whether the portfolio transition is translating into a cleaner earnings profile.