This was the message from IGO MD and CEO Ian Vella to a large audience attending the WA Mining Club’s June luncheon at Optus stadium on June 27th. Fresh from participating in the Chinese premier’s recent state visit to WA, Ivan noted that of all potential site visits, priority was afforded to touring a lithium processing facility in Kwinana.
Ivan had also recently travelled to China and witnessed, firsthand, the strong uptake of high-quality electric vehicles. Supported by government incentives encouraging EV usage to reduce urban pollution and with range anxiety being of little concern for Chinese consumers, EVs are churned out of fully automated factories, slashing manufacturing costs and hastening production.
Ivan shared a fascinating video of a Chinese battery replacement station, where cars have a depleted battery swapped out for a fully charged battery in around 90 seconds – like taking a gas bottle to a service station and swapping empty for full. Drivers pay around $1,500 per year for this service, which limits total running costs and removes the issues of battery life concern and car depreciation.
We also heard about the amount of research being conducted into battery technology to continue to improve safety, driving range and battery life – all helping to address some of the concerns surrounding EVs. Whilst questions remain around the environmental credentials of requiring high levels of embedded carbon in each new electric vehicle and potential increased road maintenance owing to added vehicle weight, what is clear is that one of the most populous countries on earth appears highly convicted to prioritise and pursue the rapid take-up of electric vehicles. This can only be good for the maturing global lithium market and by extension good for IGO and other lithium miners in WA.
Ivan pointed out that the opaque lithium market is immature compared to metals such as copper, lead zinc, gold and iron ore, where recognized indices have been well established, further noting that lithium market commentary tends to sound more like gossip than real market supply and demand fundamentals.
It was suggested that the recent downtrend in lithium prices is likely to reverse in the face of ongoing strong demand fundamentals and that WA miners and processors need to move fast to firmly establish our place in this growing global market, underpinned by efficient low cost operations and not reliant upon any green market premiums.
From IGO’s point of view, one of the fundamental pillars of success is described as the ‘speed of trust’, referring to the ability of the company to rapidly establish trust with all stakeholders such as Aboriginal groups, local communities and government approvals agencies,. What is inherent in this approach is the internalisation of accountability, leveraging IGO’s renowned culture and ESG credentials to advance projects in a timely manner.
IGO have unquestionably endured a challenging few years, with the tragic passing of former CEO Peter Bradford and difficult market conditions for nickel and lithium. After a baptism of fire involving the difficult decision of placing the Cosmo operation under care and maintenance only a few weeks into his tenure, the future appears bright under the assured leadership of Ivan Vella.
