By Rhiannon Hoyle
Australian miner IGO said it made an earnings loss in its first fiscal quarter because of weaker lithium prices and lower revenue from its nickel business.
The company said it produced more lithium-rich spodumene and refined lithium hydroxide--up 22% and 13%, respectively, on the prior quarter--but that prices for the battery ingredient continued to weaken. Nickel output dropped by 41% because of reduced grades at one mine and the closure of another following a seismic event.
IGO said it made an underlying earnings before interest, tax, depreciation and amortization, or Ebitda, loss of 2.9 million Australian dollars (US$1.9 million) for the quarter, which ended Sept. 30. That compared to underlying Ebitda of A$76.8 million the quarter immediately prior.
The miner said sales revenue fell by 39% quarter over quarter, contributing to a 98% plunge in underlying free cash flow.
IGO said the average price it was paid for spodumene from the Greenbushes mine in Western Australia was US$872 a metric ton, down from US$1,020 a ton during the prior quarter.
"Should the current market conditions persist, particularly the depressed spodumene price, IGO's financial results and cashflow will continue to be impacted," the miner said.
In its nickel business, cash costs for the Nova operation--where it reported reduced grades--are trending toward the upper end of annual guidance to investors, IGO said. Unit costs at the mine more than doubled quarter over quarter as the company produced less nickel.
The company brought forward the planned closure of the Spotted Quoll mine at its Forrestania operation following seismic activity in July, IGO said. The aging Forrestania operation was suspended after the end of the first quarter.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
October 27, 2024 18:47 ET (22:47 GMT)
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