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Commodities

Australia's IGO suspends nickel output after fire

MELBOURNE (Reuters) - Australia’s IGO Ltd has suspended production at its Nova nickel operation in Western Australia for around four weeks after a fire damaged its power station over the weekend, the miner said on Monday.

The fire caused “extensive damage” to the engine room of the power station and while there were no injuries, restoration of full power supply is expected to take about four weeks, the company said in a filing to the Australian stock exchange.

Production is now likely to fall by 12% to 23,000 tonnes of nickel while production costs rise by 5% to A$3.0/lb, according to an estimate by analyst Dylan Kelly at broker Ord Minnett. Nova produced 26,675 tonnes of nickel in the last financial year.

Kelly also cut by 6% or A$85 million to A$1.65 billion estimates of IGO’s earnings before earnings before interest, taxes, depreciation, and amortization (EBITDA).

Separately IGO has begun commercial production at its Kwinana lithium hydroxide refinery also in Western Australia it said on Monday.

“This is an important milestone as it reflects the ability to consistently produce battery grade lithium hydroxide. However, it remains to be seen if the nameplate capacity of 24,000 of lithium hydroxide can be achieved,” Kelly added.

Reporting by Melanie Burton in Melbourne, Himanshi Akhand in Bengaluru; Editing by Daniel Wallis and Diane Craft

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