The September quarter results from Albemarle on Wednesday night will no doubt confirm it, but the quarterly report from IGO has shown just how lucrative the Greenbushes lithium mine in southwest WA has become as the renewables juggernaut gathers pace.
The irony here is that for decades the Greenbushes mine was a tantalum and tin mine of not much note (anyone remember the company called Greenbushes Tin NL?).
It is now the world’s biggest lithium mine (with a solid wodge of tantalum each quarter), which is shared in a joint venture between Albemarle (49%) and IGO/Tianqi Lithium Corporation (51%) and produced 361,227 tonnes of spodumene concentrate (100%) in the latest three-month period.
That was up 7% from the June quarter and 35% from the September, 2021 quarter when the joint venture really kicked in.
Sales in the latest quarter totalled 338,000 tonnes – down 5% from the 4th quarter of 2021-22 (there were no sales given for the September, 2021 quarter).
This led to a quarterly sales revenue of $1.84 billion from the mine, a 112 per cent jump from the June quarter. There was no sales revenue for the same quarter of 2021-22.
A crude annualising of that quarterly figure gives a revenue figure for the year to June, 2023 to more than $7 billion from the one mine.
That’s a lot more than Pilbara Minerals which had impressive sales revenue for the September quarter of just over a $US1 billion and is heading for revenue of more than $4 billion for the year to next June.
That means between the Greenbushes mine and its partners and Pilbara Minerals two companies could be generating gross sales revenues approaching $12 billion by next June which in turn could be most of the export revenue forecast for the financial year or around $14 billion.
Driving the surge was a reset in contract pricing for chemical-grade spodumene from $US1,770/t in the second half of the 2021–22 financial year to $US4,187/t for the September quarter.
A delayed shipment from the June quarter meant the average realised price was $US3,729/t for the period, with the delayed shipment sold at the June quarter benchmark price.
IGO also reported record revenue from its nickel business of $285.2 million in the September quarter, with the Forrestania operation in WA doing best with $83.4 million of revenue in the three months.
This offset a 27% drop in revenue from the Nova operation in WA, which was affected by a reduced nickel price. The reduced sales came as Nova increased its production from 6,509 tonnes to 6,572 tonnes of nickel quarter-on-quarter.
The success of Greenbushes and IGO’s WA nickel operations led to a record underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) of $398 million for the company during the September quarter.
IGO directors said in the report EBITDA of $398M represents a quarterly record for IGO, thanks to strong operational performance from both our lithium and nickel businesses.
“Stronger production and higher spodumene prices drove outstanding earnings within the TLEA joint venture and led to IGO receiving its second quarterly dividend of $106M.
“Within our nickel business, Nova and Forrestania performed to plan, and we are also pleased to announce our Cosmos revised project plan, which lays the roadmap for the successful delivery of this project over the coming year.
IGO shares ended up 0.3% by the close at $15.34 after dipping lower in earlier trading.
