IGO Ltd shares have taken a sharp dive after the company reported a disappointing performance from the Greenbushes lithium mine, one of the world's largest hard-rock lithium operations. The stock fell as much as 8 per cent in early trading on Friday, before recovering slightly to trade around 7 per cent lower by midday.
Production and sales miss expectations
The miner revealed that production at Greenbushes came in below guidance for the March quarter, while sales also missed forecasts. IGO attributed the weaker performance to lower ore grades and operational disruptions, including planned maintenance and unplanned downtime. The company said it expects the challenges to persist into the current quarter.
Impact on financial outlook
The weaker-than-expected production is likely to weigh on IGO's financial results for the first half of the 2026 financial year. Analysts have already begun to downgrade their earnings forecasts for the company, citing the operational headwinds at Greenbushes. The mine is a key asset for IGO, which holds a 49 per cent stake in the operation, with Tianqi Lithium and Albemarle holding the remainder.
IGO's managing director, Matt Dusci, described the quarter as "disappointing" but said the company was taking steps to improve performance. "We are focused on optimising the operation and addressing the issues that have impacted production," he said in a statement. "We remain confident in the long-term outlook for lithium demand."
Lithium market under pressure
The news from Greenbushes comes amid a broader downturn in lithium prices, which have fallen sharply over the past year due to oversupply and slower-than-expected electric vehicle sales growth. The price of lithium carbonate in China has dropped by more than 70 per cent from its peak in late 2022, putting pressure on producers to cut costs and defer expansions.
Despite the near-term challenges, IGO remains bullish on the long-term demand for lithium, driven by the global transition to electric vehicles and renewable energy storage. The company is also advancing its other lithium projects, including the Kwinana refinery in Western Australia and the Mt Cattlin mine.
Market reaction and outlook
Investors have reacted negatively to the news, with IGO shares now down more than 30 per cent over the past 12 months. The stock is trading at its lowest level since November 2020, reflecting the broader weakness in lithium stocks. Analysts at Macquarie said the Greenbushes update was "worse than feared" and cut their price target for IGO.
Looking ahead, IGO will provide a detailed update on its operations and outlook when it reports its half-year results in August. The company is also expected to provide guidance on capital expenditure and cost reduction initiatives aimed at improving margins in a lower-price environment.
