The cost of building the third chemical grade processing plant designed to lift production capacity from the Greenbushes lithium mine has again blown out to $880 million.
The cost of building the third chemical grade processing plant designed to lift production capacity from the Greenbushes lithium mine has again blown out to $880 million.
IGO, one of the joint venture partners in the Greenbushes mine, told the market the total cost of the under-construction CGP3 had climbed to $880 million, up 52 per cent from its initial price tag.
The delayed processing plant – tipped to add 500,000 tonnes per annum of spodumene concentrate production capacity – was costed at $516 million in 2018.
Today’s revised budget comes after the partners conducted a review of capital estimates and schedule, which recognised industry-wide cost escalations, some changes to scope and design and delays in the completion of some work packages, IGO told the ASX.
IGO said the remaining cost to construct the plant was $270 million, with first ore now expected in the second quarter of financial year 2026.
The battery metals miner recently told the market of its refreshed long-term strategy, as the moves two of its nickel mines onto care and maintenance, with its short-term focus on Greenbushes.
IGO has an indirect 25 per cent stake in Greenbushes- one of the largest hard-rock lithium mines- through the JV structure with Tianqi and Albemarle Corporation.
The partners are likely waiting for volatile market conditions to turn before pressing go on its planned CGP4 expansion- which would add another 500,000tpa in capacity.
CGP4 was last described as a $627 million expansion project but it was initially priced at $537 million several years ago.
IGO managing director Ivan Vella said CGP3 formed an important part of Greenbushes’ near-term growth strategy.
“While market conditions for lithium are currently subdued, the strong margins and cash generation being achieved by Greenbushes is enabling reinvestment in growth which will further cement its position as the world’s leading hard rock lithium operation,” he said.
Albemarle- which owns 51 per cent of Greenbushes- was planning to invest more than $2 billion building four lithium hydroxide processing trains at its South West operations.
But two months ago, it announced it was putting train 2 on care and maintenance and was halting construction of trains 3 and 4, instead focusing on ramping up train 1.
IGO and Tianqi- the latter which holds the other 25 indirect stake in Greenbushes- have similarly been struggling to ramp up its Kwinana lithium refinery to nameplate capacity.
It all comes as lithium producers grapple with weak prices due to the supply glut and subdued demand in the market, leading several players to scale back or ice operations.
IGO shares last changed hands at $5.25 apiece, down slightly at 0.37 per cent.
