IGO has been under pressure since topping out with most miners following Beijing’s initial stimulus move last month. They disappointingly announced a non-cash and pre-tax impairment of $880-$980m for assets they bought from Western Areas (WSA) just a year ago – integration as well as the development of ESG assets is proving far harder than many anticipated i.e. reiterating our opinion that valuations are often too optimistic in this space. We still can see no short-term reason to buy IGO at current levels even if it is a popular ESG business i.e. ~75% lithium & 25% nickel.
- IGO isn’t a compelling story at the moment following the recent news around WSA, we wouldn’t be surprised to see it 10% lower.
MM may consider IGO into fresh 2023 lows
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