IGO “minimising the impact on team” as nickel asset closes

Image: Michael Evans/ , nickel, miner, worker, mine

IGO will place its Cosmos nickel project into care and maintenance mode in the wake of downturn in the battery metals market.

The company recently completed a review of the project, which identified a reduction in the expected life of mine, delays in reaching full capacity, and increasing operating and capital costs.

Compounding this is an unfavourable market, with nickel prices hovering above $US16,000 ($23,820) per tonne on the London Metal Exchange (LME) – lows not seen since early 2021.

“IGO has made the difficult decision to transition Cosmos into care and maintenance,” the company told the market.

“Regrettably, this transition will have an impact to our people and IGO… While the company expects to be able to offer some redeployment opportunities, there will be roles which will become redundant.

“IGO is providing all the necessary support for our people as we work through this difficult process.”

The transition to care and maintenance mode is expected to be completed by the end of May. IGO plans to prioritise preservation of the Cosmos assets and the completion of select key workstreams, include finishing the wet commissioning of the processing plant and processing of existing ore.

“This is not the outcome anyone at IGO wanted, however we cannot ignore the operational and financial risks involved…” IGO managing director and chief executive officer Ivan Vella said.

“We still believe there is value in Cosmos, however in this nickel environment we need to be disciplined with our allocation of capital, while retaining our optionality to restart if market conditions improve.

“Prioritising and minimising the impact on our team through this process is our absolute focus and we will provide every support we can to those people affected.”

But partial relief may be on the way for nickel producers in Australia. Government ministers met with producers last week to discuss some of the challenges facing the nickel sector.

After the meeting, the government indicated its intention to back the sector with more infrastructure, tax breaks, and international campaigning for a ‘sustainable’ pricing metric for nickel, which would help distinguish nickel produced sustainably in Australia from cheaper so-called ‘dirty nickel’.

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