The IGO Ltd (ASX: IGO) share price is down around 6% after the ASX mining share announced its June quarterly update.
IGO is involved in multiple commodities including lithium, copper and nickel. The Tianqi Lithium Energy Australia (TLEA) is a joint venture between IGO (which owns 49%) and Tianqi Lithium Corporation (51%).
IGO June 2025 quarter
The business revealed how it performed in the three months to June 2025, compared to the three months to March 2025.
Lithium (spodumene) production was virtually the same at 340kt, though the spodumene cash production costs rose 7% quarter on quarter to A$366 per tonne.
Lithium hydroxide production jumped 36% quarter on quarter to 2,126 tonnes. Nickel production also surged 22% to 5,107 tonnes.
Financials
The business reported sales revenue of A$126.9 million, a quarter-on-quarter increase of 15%. This was driven by higher nickel and copper sales at Nova, offset by lower nickel prices.
Its share of the net profit of TLEA was A$22.3 million, a quarter-on-quarter increase of 21%.
Underlying EBITDA (EBITDA explained) soared 83% to A$62.3 million, while underlying free cash flow sank 95% to A$2.4 million. Underlying EBITDA benefited from an increase in the contribution from Nova and a $16.5 million increase in the value of IGO’s listed investment portfolio.
The prior year’s cash flow benefited from an income tax refund of $34.6 million. The timing of supplier payments also impacted the cash flow.
The resources business reported its cash declined 2% to A$279.7 million.
What were the negatives?
It reported that operational issues continue to impact Kwinana lithium hydroxide refinery production, with full-year production finishing below its guidance. Its joint venture partners are continuing to discuss the right pathway for the refinery that minimises cash outflow.
Despite the “strong commitment” from the team at Kwinana to address the operational problems and ongoing issues, IGO has “low confidence in the ability of this asset to achieve meaningful, sustained improvement.”
The business also reported that rehabilitation provisions are currently being reviewed and are expected to increase by between $50 million to $70 million across Nova, Forrestania and Cosmos. There is ongoing work to refine this estimate for the FY25 financials.
Final thoughts on the IGO share price
It’s not helpful for shareholders that one of its major assets is not performing up to expectations and standards. Time will tell what happens on this front.
The business has fallen heavily (13%) in the last week but it’s still up more than 10% in the last month. I’m not sure if it’s a good time to invest with a lot of uncertainty surrounding commodity prices and TLEA, so I’d rather focus on other ASX shares.
