IGO released a revised budget for the Chemical Grade Plant 3 (CGP 3) expansion at Greenbushes in late October. The capex for the project increased to A$880m, with A$270m left to be spent. First ore is forecast to be delivered in 2QFY26. Given the soft pricing environment and ongoing issues with the downstream plants for all Greenbushes partners, we suspect that the ramp up of the new capacity could be slowed. Committing to CGP4, construction of which we assume commences in mid-2027, could also be pushed back, delaying the pathway to achieving the 2.0mtpa ultimate capacity target. Incorporating the cuts to our spodumene price outlook drives a 6% cut to our price target to A$6.40. IGO remains cash flow positive at spot prices, and we reiterate our BUY rating.
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