Australian battery metal producer IGO Ltd has announced that it will record a non-cash impairment charge against its nickel exploration assets for the fiscal year 2024. This will bring IGO’s total nickel impairments up to nearly A$1.5 billion in the past two years.
The impairment charges, expected to be between A$275 million (US$185.9 million) and A$295 million, relate to the company’s Western Australia-based Silver Knight and Mt Goode nickel exploration assets.
IGO has been undertaking a strategic review to reevaluate its resources and rationalize its broader exploration portfolio. The move comes as the company is reeling from falling prices of key commodities.
In January, IGO had already flagged that it would put its Cosmos nickel project in Western Australia into care and maintenance due to lower prices. The company had previously recorded an impairment charge of A$171.8 million for its Cosmos and Forrestania nickel assets, adding to a nearly A$1 billion write-down in 2023.
The Mt Goode deposit is part of the Cosmos project, while Silver Knight forms a part of the Nova nickel-copper-cobalt operation.
The impairment announcement by IGO comes as the global nickel industry grapples with a plunge in metal prices and an oversupply in the market. Last week, mining giant BHP Group said it will suspend its Western Australia nickel operations due to these market conditions.
In summary, IGO’s decision to record significant impairment charges against its nickel assets reflects the company’s strategic shift amid the challenging market environment for nickel producers.