IGO sees dividend from Greenbushes, Australia’s most profitable lithium mine, scrapped

The lithium market’s disintegration has been laid bare with a gushing stream of dividends from the Greenbushes mine drying up.

IGO’s joint venture with Tianqi will not receive a quarterly payout for the 51 per cent stake they own in the Greenbushes spodumene mining operation in WA’s South West.

“Due to prevailing market conditions for spodumene and lithium hydroxide no dividend was declared by TLEA,” IGO stated in its September quarterly report released on Monday.

While the Kwinana hydroxide processing plant — fully owned by TLEA — has been plagued by issues and is not profitable, Greenbushes had been spitting out cash even when most of the other lithium mines in Australia had been struggling.

IGO received a Greenbushes dividend payment of $159.3 million for the June quarter and in the most recent financial year the company pocketed almost $1.6b from the mine.

TLEA is still in the black with quarterly profit of $37.1m, but that figure is down 45 per cent from the June quarter.

Most analysts had predicted there would be no Greenbushes dividend for the three months ended September 30 — given the current price environment, plus the money being poured into the mine to extend its life.

IGO chief executive Ivan Vella said Greenbushes had a “great quarter” in light of the dour market conditions.

“Obviously the sales were down a little, given that we didn’t have that 200,000 tonne shipment that we had in the prior quarter, but overall a good steady quarter,” Mr Vella said.

Across its business IGO slumped to an underlying earnings loss of $2.9m for the September quarter. The company’s ailing nickel arm performed worse than expected.

IGO’s Forrestania nickel mine reached the end of its life last month and its last remaining nickel operation — Nova — will cease production in 2026.

The company’s underlying cash pile dropped from $468m to $258.7m by September 30.

Shares in IGO were down 1.3 per cent in early trade, before rebounding by the close.