Australian miner IGO will transition the Cosmos nickel project, in Western Australia, into care and maintenance, the company announced on Wednesday.
Since initiating a review of Cosmos in mid-2023, commodity prices have deteriorated significantly, impacting on the economics of Cosmos.
The review also revealed a decrease in the expected mine life, setbacks in achieving full processing plant capacity and additional rises in both operating and capital costs.
“This is not the outcome anyone at IGO wanted, however, we cannot ignore the operational and financial risks involved in continuing to develop Cosmos in the current environment. 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,” said MD and CEO Ivan Vella.
IGO said it would record a further impairment of between A$150-million and A$175-million against the asset in the first-half results, to be released on February 22.
News of the Cosmos project follows an announcement on Tuesday that production at the Greenbushes lithium mine, which IGO owns with Albemarle, will be trimmed.
The production guidance for spodumene concentrate was cut to a range of 1.3-million to 1.4-million tons this financial year, down 100 000 t. Sales will be about 20% lower than production in the second half as inventories build at site.
Prices of spodumene have extended losses after collapsing by 80% last year.