We are initiating coverage on IGO with a BUY rating and set a A$8.80 price target. IGO’s 24.99% interest in the world class Greenbushes spodumene project is the dominant driver of both earnings and our valuation. Staged expansions should see Greenbushes lift spodumene production from ~1.5mtpa to ~2.0mtpa, providing IGO with exposure to ~500ktpa of spodumene concentrate from FY30. The large impairments taken in the nickel business have been disappointing, however, with Greenbushes accounting for +80% of our valuation, have been largely a distraction from IGO’s core investment case in our view.
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