Immense Financial Deficit of A$955 Million for IGO in the Year 2025

In a surprising turn of events, Australian mining company IGO Limited has reported a net loss of A$955 million for 2025, a stark contrast to the previous year's profit of A$3 million. This disappointing result has led to the suspension of dividend payments for the financial year.

The financial losses can be attributed to several factors, including the impairment of assets at the Kwinana lithium refinery, which contributed to combined losses of A$642 million related to the TLEA investment. Additionally, the full impairment of deferred tax assets worth A$58 million was recognised, further exacerbating the financial losses.

The Kwinana lithium refinery's struggles mirror wider issues affecting the battery minerals industry. The industry is grappling with lithium market oversupply, nickel price volatility, slower-than-expected electric vehicle sales growth, Chinese market dynamics, supply chain restructuring, and major automakers revising battery material procurement strategies.

IGO's financial challenges are not unique in the current market. Multiple lithium producers have announced project delays or suspensions, several nickel operations globally are on care and maintenance, and industry-wide impairment charges are common.

Despite the financial losses, IGO maintains certain financial strengths, including approximately A$280 million in cash reserves and access to additional liquidity through credit facilities.

IGO's management has outlined several strategic initiatives to navigate these challenges. These include a disciplined portfolio review, operational optimization, cost reduction programs, a strategic review of exploration investments, and potential for selective growth opportunities. The company is also focusing on maximizing value from its stake in the Greenbushes lithium mine, optimizing efficiency at remaining operations, implementing stringent capital allocation processes, evaluating strategic options for underperforming assets, and positioning for recovery when battery materials markets stabilize.

The Nova Operation, a significant contributor to IGO's revenue, generated 19% lower revenue in 2025 due to declining nickel prices, reduced sales volumes, and increased production costs. The Nova Operation, along with the Jaguar nickel project, faced significant operational challenges in 2025, contributing to the financial losses.

The Forrestania Operation, another key operation for IGO, faced severe operational disruptions, including a temporary halt due to a significant seismic event and a subsequent decision to permanently close the mine in September 2024.

In an effort to improve efficiency and reduce costs, IGO is exploring innovative lithium extraction methods. The company's nickel operations face continued challenges from lower global prices and operational issues.

IGO's underlying EBITDA swung from a profit of A$581 million in 2024 to a loss of A$43 million in 2025. The company's nickel revenue decreased by 38% from A$823 million in 2024 to A$512 million in 2025.

Despite the financial losses, IGO's leadership has acknowledged the situation and emphasized plans for recovery. The company is confident that by focusing on its strategic initiatives and positioning itself for market stabilization, it can navigate these challenging times and position itself for future success.

In light of the financial losses, IGO did not declare dividends in 2025, marking a 100% decrease compared to the previous year. The company remains committed to its strategic focus on battery materials despite the current challenges.