IGO Shares Plunge as Production Setbacks Trigger Impairment Forecast

Key Highlights:

• IGO Limited flagged a $70–$90 million impairment due to Kwinana refinery issues.
• Full-year lithium production missed targets, triggering a 7.2% share price drop.
• At the time of writing, IGO shares were down 6.6% to $4.67.

Kwinana Refinery Woes Weigh on Full-Year Output and Market Sentiment

Shares of IGO Limited (ASX: IGO) slumped following the company's update on its Kwinana lithium hydroxide refinery operations. At the time of writing, the stock was trading at $4.67, down 6.6%, after dipping as low as $4.64 — marking a 7.2% intraday fall. The company revealed that persistent operational issues at its Kwinana facility had severely hampered lithium hydroxide production, pushing full-year output below previously issued guidance. In addition to missing production targets, IGO also flagged a non-cash impairment in the range of $70 million to $90 million, further eroding investor confidence.

Production Miss Sparks Market Concerns

Despite recent optimism surrounding lithium’s long-term demand in electric vehicle supply chains, IGO’s struggles underscore the challenges of scaling up processing infrastructure. The Kwinana refinery, a joint venture with Tianqi Lithium, has experienced technical delays and lower-than-expected throughput, limiting its ability to contribute to IGO’s earnings. The shortfall is particularly concerning given the company’s reliance on Kwinana to strengthen its position in downstream lithium processing and value-added exports.

Investor Confidence Jolted by Impairment News

The expected impairment charge is a major red flag for investors, as it reflects not only current production troubles but also potentially overestimated asset values. Analysts warn that unless IGO can stabilise operations quickly, market sentiment may remain cautious despite the strategic importance of the lithium business. Management has committed to ongoing technical improvements and reassessing the plant’s production strategy to bring performance back in line with expectations.

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