IGO slides as lithium volatility hits earnings

The news: Lithium and nickel miner IGO has posted a drop in first-quarter earnings and outlined a weak outlook amid volatility in the lithium sector.

The numbers: IGO shares were down more than 7% to $10.03 in early trading on the ASX after the miner reported underlying earnings fell 42% for the September quarter to $362.2 million, reflecting lower spodumene pricing and a softer performance from its nickel business. However, its net profit came in at $391.5 million, an improvement from a $454.2 million loss in the impairment-affected June quarter.

The context: IGO said it was monitoring the volatility in the lithium sector closely, but said spodumene sales would likely be affected in the December quarter. “Looking ahead, we note the recent volatility in the lithium market and the impact this is having on participants across the supply chain, a dynamic which is not unexpected for a market which is growing rapidly,” acting CEO Matt Dusci said. The company had posted a record annual profit last month, despite a disappointing performance in its nickel business following $968 million impairment on two mines it had acquired through the Western Areas deal.