KALGOORLIE (miningweekly.com) – Clean metals company IGO will spend some A$338-million on the Cosmos nickel project, in Western Australia, as it works to bring the project into operation.

Cosmos was acquired by IGO as part of its acquisition of nickel miner Western Areas in 2022, and the Odysseus underground mine is currently being developed at the project.

IGO acting CEO Matt Dusci said on the sidelines of Diggers & Dealers that the processing plant construction was some 85% complete, while shaft and key shaft infrastructure was also nearly 85% complete.

A comprehensive review of the Cosmos project is under way and would be completed by the December quarter of this year. The review is expected to result in a revised plan for the project, and would detail how IGO would drive optimum value from Cosmos.

IGO has warned of a non-cash impairment of between A$880-million and A$980-million in its financial results for the year ending June, relating the reassessment of the accounting value at Cosmos and the Forrestania assets, to reflect higher capital and operating costs, challenges to the mien production schedule, and delays in development at Cosmos.

“What we are doing is resetting the value proposition at the Cosmos project,” Dusci told journalists.

“We acknowledge that the results are disappointing and we have to work hard to drive value. As an organisation, we have always been focused on value. There is a whole series of learning that will come out of this, and we will share all of that at the right time. But ultimately it is about rolling up our sleeves and demonstrating the value that we can see.”

Meanwhile, at its lithium hydroxide facility, in Kwinana, IGO will spend between A$35-million to A$45-million in rectification capital at Train 1 during the 2024 financial year.

Production at Train 1 has been lower than expected due to ongoing technical challenges, which delayed the start-up of the plant after a scheduled shut-down in May. While the plant was currently running at around 20% capacity, Dusci said on Wednesday that it would be at around 50% of nameplate capacity by the end of year, and would continue to ramp-up during the next calendar year.

“We are the first company to produce battery grade lithium hydroxide outside of China, and there has been a lot of legacy issues with just some poor engineering on Train 1. It is just taking the time to ensure that we rectify that,” he added.

The company has not provided a production guidance for lithium hydroxide for 2024.

“The ramp-up profile of Train 2 will be different than we have seen in Train 1. We are not going to rush, we will make sure that we have it all locked down,” Dusci added.

Train 1 of the Kwinana refinery has a 24 000 t/y production capacity, and construction of Train 2 would add a further 24 000 t/y in capacity. Initially, construction of Train 2 had been slated to start in the first half of 2023.

Ultimately, the Kwinana facility would have the capacity to add two additional trains, taking full production capacity to 96 000 t/y.