The lithium sector has been hit by writedowns and cost controls due to a supply glut and headwinds to electric-vehicle demand. Prices have plunged 86% from a record high in late 2022 and continued to drop in the first half of this year. However, they’ve revived in recent weeks after a major mine was shut in China.
Mineral Resources posted a net loss of A$904 million ($588 million) for the year to June 30, compared with a A$125 million profit the year before. IGO reported a net loss of A$954.6 million during the period, and a full impairment of its Kwinana lithium hydroxide refinery assets.
“We got the lithium price wrong, and our earnings and net debt levels have been greatly impacted,” Mineral Resources’ Managing Director Chris Ellison said in a statement Thursday. “Our focus of late has been on cost and performance to ensure the business is set up through the cycle.It appears the worst could be over for lithium miners, however. UBS Group AG this week lifted its spodumene price forecast by 9% to 32%, citing expectations for “broader and deeper” Chinese supply disruptions. It also upgraded IGO’s share price target by 20%.
The increased likelihood of supply disruptions in China in 2026 “now sees the market almost in deficit,” UBS said. However, the expected return of that supply and other idled or under-utilized capacity could see “some unwinding in 2027,” it said.
IGO Chief Executive Officer Ivan Vella said the long term viability of the Kwinana lithium hydroxide refinery in Australia is “challenged” but added that the company believes the market fundamentals are positive.
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