News: IGO UPDATE 1-Australia's IGO freezes nickel project, trims lithium forecast

(Recasts, writes through)

Jan 31 (Reuters) - Australia's IGO Ltd (IGO) said on Wednesday it would put its Cosmos nickel project in Western Australia into care and maintenance given low prices for the metal, as it also trimmed its annual lithium production forecast.

Australia's nickel producers have been squeezed by Indonesia's emergence as a supply powerhouse which has led to a 40% price slump over the past year.

IGO wrote down the value of Cosmos and its Forrestania mine by nearly A$1 billion ($659.90 million) in December, and said that it foresaw an additional impairment of A$160 million to A$190 million.

"This is not the outcome anyone at IGO wanted, however we cannot ignore the operational and financial risks involved in continuing to develop Cosmos in the current environment," IGO CEO Ivan Vella said in a statement.

The company also trimmed production guidance at its Greenbushes lithium project to 1.3 million metric tons to 1.4 million tons for fiscal 2024, a 7% drop from original guidance. Due to market volatility, it did not sell any lithium hydroxide during the December quarter, it said.

Analysts expect Australian lithium producers may be set to track the nickel industry in project curtailments and delays this reporting season, given slower-than-expected electric vehicle sales. ($1 = 1.5154 Australian dollars)