IGO’s leader, Ivan Vella, says a more efficient supply chain in China has helped their lithium refiners avoid the same technical problems that have plagued Western Australia’s producers.
Mr Vella was asked why Tianqi’s lithium hydroxide refineries in China work well but the Kwinana refinery IGO has in partnership with Tianqi has been beset by issues.
“Because your supply chain is not the same,” he told media on Monday at the Diggers and Dealers conference.
“The level of capability of suppliers and equipment providers (is different), and remember, a lot of the equipment comes from China as well — it’s all there on their doorstep,” he said.
“And the turnaround time on things is super quick . . . we plan a shutdown (it) takes us 10, 15 weeks to get parts ordered, get them manufactured, get them shipped, get them here, get it all ready, scheduled, and so on.
“They (China) have them just down the road, so there’s a big difference there in terms of that pure scale and the underlying industry support.”
His comments come after the misfiring Kwinana plant had another loss-making quarter for the three months ended June 30.
For the June quarter Kwinana lifted lithium hydroxide production to 1330t, with the earnings before interest, taxes, depreciation, and amortisation loss narrowing from $62.6m to $18m.
“On Kwinana, look a good quarter . . . maybe not good, a better quarter,” Mr Vella said last week.
Australia’s largest lithium producer — Albemarle — has also faced a litany of technical issues at its Kemerton refinery near Bunbury.
Mr Vella, unlike many of his critical mineral contemporaries, has not been a vocal supporter of the Federal government’s production tax credits. He reiterated that view on Monday.
“Fundamentally, we have to make the decisions based on a good business case, and has to be competitive on its own right,” he said.
“So if you really live and die on some subsidy, think that’s a very dangerous place to be.”
On the nickel front Mr Vella said IGO would not give up on the unfinished Comsos development, which the company mothballed in June amid a grim nickel market.
“We know there’s a resource there,” he said.
“What we need to do is understand it better and study, we’re doing a study on that sort of from from a clean sheet building upwards, and try and understand how low we could get costs to extract that resource, and if we can get that into the right territory, then we can bring that back online.
“So it’s a fantastic option to work through, but I’m just going to let the team work through step by step, and not get too over excited too early.”
But he said IGO was directing more of its shrunken exploration budget towards lithium and copper.
“We know the demand growth for lithium is significant. So we can find, maybe it won’t be Greenbushes, but if we can find another resource that’s obviously very exciting,“ Mr Vella said.
“And copper everyone’s talking about. It’s super, super important in the world the energy transition and if we can find some more, I think that’ll be very welcome.”
Buying pre-existing copper mines is not at the top his “go-to list”.