https://thewest.com.au/business/mining/more-woes-for-igos-cosmos-...

https://thewest.com.au/business/min...lted-and-another-writedown-flagged-c-12886203

More woes for IGO’s Cosmos project as construction halted and another writedown flagged
Simone Grogan and Adrian RausoThe West Australian
Wed, 13 December 2023 9:03AM




Pictures from the Resources Technology Showcase 2019 Perth, Day 2, at the Perth Convention Centre. Credit: Ross Swanborough/The West Australian, Ivan Vella, Managing Director - Port, Rail & Core Services Rio Tinto Iron Ore.

IGO has halted construction on part of its under-review Cosmos underground nickel mine and has said there will likely be another writedown to come on the already struggling asset.

Issuing a statement to market on Wednesday — just days after former Rio executive Ivan Vella took up his new post as chief executive — IGO said it would need to redeploy staff after announcing a move to shift the project to an ore trucking operation as opposed to a mechanised materials handling system that was previously planned.

“Regretfully, there will be an impact to some roles, however IGO is working on redeployments within the IGO business and is providing all the necessary support to our people through this process,” the company said.

The scale of the potential job losses was not disclosed.
It’s understood about 200 contractors and employers are employed at the mine.
“IGO advises that it is likely to record a further impairment against the Cosmos assets in the company’s first half FY24 results.”

Further impairment on the project — which it acquired from Western Areas as part of a $1.3 billion takeover — would add to the near-75 per cent of value it has already slashed from its Western Areas purchase.

In August IGO recognised a $968m impairment against the Western Areas assets, which counts the Cosmos mine as the flagship project.

IGO finalised its acquisition of Western Areas in June 2022, meaning in the space of just over a year and a half IGO is likely to lose over 80 per cent on its investment.

Less than six months after acquiring Western Areas IGO said Cosmos — which is located near Leinster in the Goldfields — would cost up to $825 million to complete, almost triple the original estimate.

Shares in IGO slumped 2.5 per cent on the news by 9.20am, to trade at $7.52. Its shares have nearly halved over the past year amid a weak market for both lithium and nickel.

IGO has been contacted for comment.