Monsters of Rock: Can IGO turn its new Cosmos mine into an electric avenue?

IGO hits up Perenti and ABB to produce study on all electric nickel mine at Cosmos
Battery metals giant targeting mid-2025 date to go fully electric
Mount Gibson Iron surges on news it could beat FY23 shipping guidance

IGO (ASX:IGO) has set itself the goal of turning its new Cosmos nickel mine in WA fully electric by mid-2025, bringing underground contractor Perenti (ASX:PRN) and ABB on board to deliver a pathway to help decarbonise the battery metal project.

Acquired in IGO’s purchase of Western Areas last year, the Odysseus deposit at Cosmos is the next major nickel project to be developed in WA, with first ore expected next year.

Discovered by Kerry Harmanis’ Jubilee Mines and sold for $3.1 billion at the top of the nickel market to X-Strata in 2007, the project was revived after Western Areas cannily purchased from Glencore at nickel’s ebb in 2015 for $24.5m.

Now feeding into IGO’s battery metals business as the long term source of feed for a proposed nickel sulphate plant in Kwinana, it has been reimagined as a mine of the future.

In particular, western nickel producers are hoping to receive a so-called green premium for their products seeking customers who will favour th low emissions profile of their metal against larger suppliers in Indonesia.

A fully electrified mining operation would no doubt help realise that ‘green premium’.

The ‘all-electric mine study’ between ABB, Perenti and IGO will include mine design optimisation, production, and operating philosophy, fleeet selection, power distribution and infrastructure design, electrification system and battery management, ESG and safety impact analysis, and capex and opex cost modelling.

“At IGO, we believe in a cleaner energy future, and that extends to our underground mining operations where the electrification of our fleets will create a safer, greener, and more productive operation,” IGO head of technical sevices Chris Carr said.

“We are excited about this future and our collaboration with Perenti and ABB to make this a reality.”

IGO revealed plans last October to increase the scale of Cosmos from a 750,000tpa to 1.1Mtpa plant, more than doubling the cost of delivering the mine to between $795m to $825m.

Commercial production is expected in the first quarter of FY24.

IGO (ASX:IGO) and Perenti (ASX:PRN) share price today:

Happy hump day for miners

Unless you’re in gold or uranium today was a good day to be digging some dirt – not least if that dirt happens to be iron ore.

Improved sentiment abounded as China promised to cut rates and stimulate its property sector.

That’s good for steelmakers and their iron ore suppliers.

Standing out head and shoulders above the pack was small scale iron ore producer Mt Gibson Iron (ASX:MGX), which rose more than 20%.

The company said it could surpass shipping guidance of high grade 65% Fe iron ore from its Koolan Island operation in WA’s Kimberley region for FY23.

“Processing volumes have increased substantially since the start of the quarter following completion of the processing plant repairs in early April,” the company said today.

“As a result, shipments of high grade 65% Fe fines products have increased in line with the forecast provided in the Company’s March quarter activities report.

“During the June quarter so far, Mount Gibson has completed 13 shipments totalling over 0.9 Mwmt and is on track to achieve or potentially slightly exceed the Company’s guidance of 2.9Mwmt in the current financial year ended 30 June 2023.”

Shipping at grades for hematite ore only rivalled currently by Brazilian producers, MGX’s product garners a premium over the benchmark 62% Fe index.

It says 65% Fe iron ore for delivery to China is currently paying US$124/dmt, above a benchmark fines price of US$113/t.

MGX says at planned shipping rates of 5-6 shipments a month in the dry season from the June to December quarters and four per month in the March quarter wet season, it could target annual sales of 4Mwmt a year.

“Mount Gibson’s sales offtake agreements reflect the 65% Fe high grade price and, based on anticipated shipping volumes, provide the opportunity for Koolan Island to generate significant operating cashflows during the current quarter and in the 2023/24 financial year ahead,” the company said.