Nickel/lithium miner IGO was in the news yesterday following a fire at its Greenbushes lithium plant, although the company has since said production remains on track to meet FY26 guidance. Over the past year, IGO has been a classic “world-class asset, execution headache” story, which is unfortunately not an isolated theme across the ASX mining sector.
IGO’s fortunes are again becoming increasingly tied to lithium. The company is benefiting from stronger spodumene prices at Greenbushes, but management has made it clear that operational performance remains below expectations. For investors, the key question is whether Greenbushes can deliver the production and reliability improvements now being targeted. If it can, IGO offers meaningful leverage to a recovering lithium market; if not, the stock risks remaining stuck between rising commodity prices and operational underperformance.
IGO should follow lithium higher if the recovery continues, but it is still not our preferred vehicle to play that move.
- We can see IGO retesting the $7 area in the coming months, which would imply downside of around 15%.
MM is neutral towards IGO around $8.40
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