Thank you, Ashley. Good morning, everyone. Welcome to our March quarterly results call. Kath is on in the chat. CFO's joining me again for this call, and we look forward to stepping you through our results for the quarter. Obviously, been a challenging quarter with a number of issues in the nickel and lithium businesses. Before I get into that, though, I wanted to talk a little bit on safety and reflect on our safety performance through this period. And more we are seeing some positive trends in our leading indicators and very good engagement from our leaders across the business, the rate of injuries and incidents continues and remains about stable with prior quarter, but it's far from acceptable or the level that we're all aiming for. And this is, of course, both my and the broader leadership team's highest priority, something we're focusing heavily on.
I'm confident that the work program that we've got underway is and will make a difference. Clearly, reducing harm to our people is the most important work we've got to do. That really takes us through strong engagement with our teams right across the operations. In the quarter, we actually took some time out with some safety resets, safety stops, to talk about that and everyone's role in identifying and controlling the hazards that are across our business. As I noted in our half-year results call in February, we had a very serious incident where a contractor crew at Forrestania were involved in a vehicle rollover. One of the individuals involved in that was seriously injured and is continuing his recovery.
Quite a challenging road ahead, and I think that is a starting point to write across our business of just how unhealthy safety is and the work that we need to do every day and every shift to keep improving. Moving on to the lithium business, and I'll start there. Look, it was a difficult quarter. I think well signed and posted for IGO. Our balance sheet remains in a great position, and that's despite recording our first quarterly loss for a long time, many years now since that happened. That result was driven predominantly on the performance of the lithium business, reflecting both the rollout through of the lower prices that we saw through the quarter, but also the sales volumes that we signed and posted with the lower nominations from the joint venture partners.
On a positive note, though, I'm very pleased to announce that we've just confirmed agreement via the Windfield joint venture to sell 200,000 tonnes of spodumene SC6 from the stockpiles at Greenbushes to our partner TLC. That volume is over and above their off-take volume, and that sale will be booked through the June quarter. That sale will largely clear the inventories at site and will give us a good runway to make sure that Greenbushes is operating at full production through the rest of this calendar year. Digging into Greenbushes a bit further, we announced, obviously, production for the March quarter was going to be lower than the mine's capacity as the talented team worked to manage their inventory build against the production demand from the JV partners. Production was 280,000 tonnes, 22% lower than the prior quarter, and sales were reduced even more than that.
As a result, the lower cash production costs were marginally higher at AUD 386 per tonne, and our sales revenue of AUD 286 million, obviously, substantially lower than the previous quarter, attributed both in part to the volumes but more significantly to the lower realized prices, which dropped to around $1,000 USD per tonne as compared to $3,000 USD in the prior quarter. As you also know, the new monthly pricing mechanism took effect through this quarter. The other point I wanted to mention around Greenbushes was our capital program. Work continues on the build of CGP3. I was down there a few weeks ago with Matt, having a look at that while they had some delays with some of the piling early on. It's progressing well now. We saw the steel coming out of the ground, and they've really got some rhythm up.
So I'm pleased to see that's getting full attention from the team there. We went through the mine services area. That's completely commissioned, and they're just finding out the bugs, but they're all up and running using that for the mine. And the completion of the first couple hundred rooms, the accommodation's done. There's more work coming, and we expect that facility to be done around the mid-year. Turning to Kwinana, I was also down there a couple of weeks ago, and it was great to sit down with the team and look at their detailed plan for the rest of 2024. What we did see, though, was a continued ramp-up improvement of the performance. Obviously, still well below nameplate and our expectations, but they are producing very consistently now the great battery-grade product. 96% of the product is hitting that target.
Very low levels of impurity in the material as well, which is well sought after by our customers. So the quality of the product is hitting the mark, and that's very important. It is obviously all about the ramp-up and volumes now. We spent some time looking at their plans, and I was very encouraged by both the level of thought and work that they've gone into that, but also the team. I mean, the leadership team there were well aligned, were teaming well, really thinking through how they need to support each other through what's going to be a challenging year, but I expect to be able to deliver a step change in their production output. Moving on to our nickel business, I'll start with Cosmos. As we announced in January, we transitioned Cosmos into care and maintenance.
That's been a difficult process for our people, as you can imagine, significant impacts on the people who had signed up there to be part of a new mine for the new future. So it has meant a lot of care and attention, and I give a lot of credit to the leadership team in the way that they've gone about that work. They've really been very sensitive and thoughtful about the impact on individuals. They've also put a lot of focus onto the assets, of course, and brought the mine effectively to a stop. They're ramping down the assets and putting those into storage on-site and off-site as needed to make sure that everything's kept in good shape. Obviously, we're in the process of milling the available ore and producing concentrate.
We produce or process 127,000 tonnes of ore into concentrate through the quarter and shipping commenced in April. There's a further 161,000 tonnes of ore available to be processed at the end of March, and we expect that, as it's produced, to be sold certainly mostly by the end of June this year. Total costs at Cosmos for the quarter were AUD 61 million, some of which has been capitalized in inventory, but much of it's now being expensed going forward. We expect the June quarter to benefit from that revenue that's flowing through from our product sales and offset some of the remaining costs as we ramp down into care and maintenance. Turning to slide 8 and moving on to Nova, the quarterly result there was impacted by a number of challenges.
The weather, which I think we saw right across that part of Western Australia, impacted our operation as well. But more significantly, there were a number of operational issues coming out of the scheduled shutdown in March. We saw a big impact on mill availability, and of course, that flowed through into our copper nickel production and, of course, indirectly into our costs. Copper and nickel production were 10% and 16% lower, respectively, quarter-on-quarter, and greater cash costs up 21% to just over $5 a pound. Nova revenue was marginally higher due to the production sales, and the average real-life price was in line with prior quarter at around $25,000 a tonne. Nova's free cash was lower quarter-on-quarter, again attributed to the lower sales and timing.
Despite the continued weakness in the nickel market and obviously lower production, we're still generating positive cash flows, and year-to-date total, it's just over AUD 200 million. Move on to Forrestania. As you know, that mine is coming to its end of life. We're starting to see more and more of that variability in those challenges with the ore body as we get through the final sections of it. We achieved marginally lower quarter-on-quarter production, and cash costs were also lower, which was good to see. They did experience some challenges with their trucking of product to get it out to our customers. That was both a function of the weather that we saw but also some road access constraints.
That impacted revenue through the quarter, but we expect that to improve through the June quarter coming up as we clear most of that flow from the inventory. Importantly, Forrestania has continued to generate some free cash during the quarter thanks to our hedge position, which is priced at $32,000 a tonne. Recognizing, obviously, we've got a fairly short mine life left at Forrestania, we're well into our work on planning and starting that ramp-down into care and maintenance and thinking through the rehabilitation plans that will follow that so that we can have an orderly and responsible transition for that operation. Moving on to slide 10 and exploration. I don't want to go into the detail of the individual work programs. We've got some more of that in our quarterly report. But I did want to mention that we have commenced a comprehensive exploration business review.
We're working through that closely with the team to help us prioritize our project exposure, our portfolio, capital employment in this space. We've got absolutely stellar capability in this space, amazing technical skills, and I think real capability right through the pipeline and lifecycle of exploration. It's a unique capability in the industry in Australia, and we have an amazing portfolio of tenements, some real belt-scale positions across various respective grounds of the country. So we need to make the very best of that, realize or not waste any of that opportunity, but equally look hard at how we're translating that to value through our business. And so that review is progressing, and we'll provide an update the next quarterly on that work and the outcomes. I'll come back and wrap up with a few summary comments in a little bit.
But first of all, let me hand over to Kath to run through some of the financial highlights of the quarter.
Thanks, Ivan. Just to Slide 13, where we summarize our financial results for the quarter. At Nova, we've seen a decline in IGO's share of profit from TLEA, which was a loss of 10 units for the quarter. This reflects lower lithium prices and sales volume at Greenbushes and an EBITDA loss at Kwinana as expected for an asset in ramp-up. The EBITDA loss at Kwinana of AUD 63 million for the March quarter was significantly lower than the loss recorded in the December quarter, primarily due to materially lower non-cash NRV adjustments as well as higher revenue generated by hydroxide sales. Non-cash adjustments accounted for just over one-quarter of the results.
The group recorded an underlying EBITDA loss of AUD 15 million for the quarter, meaning the loss recorded by our business excluding lithium was AUD 5 million. The predominant driver here was the loss impact from Cosmos. Group underlying free cash flow was AUD 79 million for the quarter, and we reconciled our cash position on the next slide. You'll note our cash balance stayed steady over the quarter at AUD 276 million despite several notable movements, including the interim dividend payment of AUD 83 million and AUD 72 million cash outflow relating to Cosmos. Key inflows included AUD 106 million income tax refunds, a AUD 25 million dividend received from TLEA, and AUD 52 million received from our operating nickel business. Importantly, our Nova and Forrestania operations continue to generate underlying free cash flow despite challenging market conditions in the nickel sector.
Our balance sheet remains strong with liquidity of just under a AUD 1 billion. It not only provides us optionality but also provides a strong platform for growth and to expand our market headwinds. That's you, Ivan.
Okay. Thanks, Kath. Maybe just a quick sort of wrap-up and summary, and then we'll open up for some questions. Firstly, on safety. I mean, the five priorities I've set out here, I've talked about really since my first quarterly call back in January. Safety's clearly the highest priority for us. We've made some progress, but there's plenty more to do. I'm confident we've got the right work in front of us, the right program, and the right engagement from our leaders, but there is still plenty to do. In terms of our results, look, it was a challenging period for IGO on multiple fronts. The most significant, of course, for that was the lithium prices and lower production compounding in the same period.
That said, the additional 200,000 tonnes of sale I just mentioned will definitely unconstrain the operations team at Greenbushes and allow them to focus on full production rates. I think that's a very healthy outcome for the rest of the year. We are focusing on working closely with our partners to optimize the Greenbushes asset. I've talked about that previously as well. There's plenty to do. It's a fantastic ore body. It's got a very long life, lots of opportunity, and I think bringing our collective strengths will help unlock that. Kwinana, look, that's been a real challenge for this business for some time, but I was very encouraged coming in on my last visit and discussions, working through their detailed plans. Their agenda or their plan for 2024 is hard. I won't make light of it.
And I think as I've learned more about this industry, I see that across the industry, anyone working in the lithium hydroxide refining process has got plenty to think about. What I see, though, is a team that's very clear on those challenges. They've got the right actions in place. They know where they need to focus on their risks, and they're managing the asset better and better each month, which is great to see. Notwithstanding some of the operational difficulties at Nova and Forrestania, some out of their control, some in the business that are generating cash, and we've got plans to manage those and optimize their cash flow safely and sustainably through the end of the mine life for each asset. And I've talked a bit about expansion. Look, I don't want to overstate the potential and the opportunity there. It's very significant.
I realize there's been some frustration with the results from the exploration investment that we've made so far, but this is not something that we want to shy away from. We want to make sure it's targeted and managed very thoughtfully but don't underestimate the capability and the dedication that our team has. And I'm convinced their work programs are going to lead to some great success. It's a key part of our strategy, and as we work through our refresh, that'll come through. I'll share more of that in the coming months once we complete that through the next quarter. Moving on to slide 17. Look, I think there's a lot to be excited about IGO at the moment.
We've come out of a difficult quarter, but if I look at the level of commitment and dedication to our purpose and the focus across the broader business, living our values. Fantastic to see the energy from the team. IGO's in a great position. We have a fantastic platform, our financial strength, and our balance sheet of cash generation, exposure to the world's best lithium asset, and our nickel business remains cash-positive. Our people and culture, which I've talked about previously, continues to shine through. Then most importantly, our purpose and clarity of where we're taking the business as we refresh the strategy and standards out in a very unique setting. Lots to be positive about to go along. Thanks for listening so far. I'll hand back to the operator now to walk through with your questions.
Thank you. If you wish to ask a question via the phones, you will need to press the star key followed by the number 1 on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the Ask A Question box. In the interest of time, we ask today that you please limit yourself to one question and one follow-up question per person. Your first question comes from Hugo Nicolaci with Goldman Sachs. Please go ahead.
Morning, Ivan. Kath, thanks for the update this morning. Just a couple of questions on the lithium business, please. Firstly, on Greenbushes, for the additional sales volume, any indication from Tianqi, whether that's for the ramp-up of their own hydroxide plants or more of a reflection of broader market conditions and how they're seeing the market? And then just to clarify, is the 180-day payment terms on that volume subject to any provisional pricing? Thanks.
Yeah. Hi, Hugo. Thanks. Look, I can't really comment on TLC's intention for the product specifically. It's probably a good question for them. So look, just great news that they're pulling that product through, and I'm sure they've probably got a number of different pathways there. In terms of the pricing, look, the 180-day payment terms are sort of recognizing the value of getting those tonnes out and obviously the reduced storage costs and so on. So it's a one-off in terms of that sale. Otherwise, the pricing mechanism from Talison remains the same.
Thanks, Ivan. Just as a follow-up on Kwinana for Train 1 and then the shutdown in September, any color there on what's being rectified or equipment costs and how meaningful of an uplift you're expecting in utilization as a result?
Yeah. Look, I don't want to give numbers. I don't want to jinx the team. And I said that when I first started in this role. Until I can see a model of the physical asset in a digital sense where we've got the basis to do that kind of forecast work, I don't want to start putting numbers out. They have got a great plan. It's aggressive. I'm sure they're going to push themselves to the limit. I think what's encouraging is, step back from the numbers per se, is the depth of understanding of what's bottlenecking or holding up production in that continuous flow and the actions they're taking to remediate that. What I saw was a really deep understanding in the behavior of particularly the back end of the plant where we've had problems. The improvement will come in two parts.
There will be initially improvement that comes through till the big shutdown that's planned in August, September, just through better asset reliability and better operating control of the asset. They've got, again, very specific work programs in place to improve there, and that should deliver step-by-step improvement month-on-month. We've seen that, obviously, in the last quarter, and the April result was an improvement again. So we're just getting more and more confident that they're getting in control and their understanding of the asset's behavior is better. And then, of course, we had this one significant shutdown where they had a number of big pieces of work planned to install changes to the asset to remove some of the things that bottlenecked or holding it up. All in all, so I'm not prepared to give you specific numbers at this point, but they're in a difficult position.
They are working well on that digital model as well that's coming together. They've got a SysCAD plant model built up. They're busy connecting that into the underlying systems. And at my next visit, I'm hoping to actually see some of that working in progress. But I'll have to come back to you once I've gone through that and then get to some specific numbers.
Great. Thanks a lot, Ivan. And maybe just one quick follow-up, if I could. Train 2 , just confirming that the installed equipment there, that's already in place, have you had issues with any of the corresponding same equipment in Train 1 that have been significant or not expecting any issues with the previously installed Train 2 equipment?
Look, most of it's the front end that's been installed, and I think the issues they did have with normal commissioning issues, nothing material and nothing that would give us concern with what's being put in place. The bulk of the issues have been in the back end of the plant, which was not built. That said, of course, the study that's underway or the work that's underway is taking the learnings from Train 1 and contemplating what's the best path for that should we decide to make that extra capital investment.
Thanks, Ivan. I'll pass on.
Thanks, Hugo.
Your next question comes from Rahul Anand with Morgan Stanley. Please go ahead.
Good day. Ivan and team. Thanks for the call. Look, I've got two on the lithium business as well to follow up from Hugo's questions. Look, first one is on Kwinana. You've talked about the major shutdown in September. I guess you're saying you don't want to talk around numbers, but the time we had attended the site trip, there was still a target in place to achieve capacity utilization in line with the nameplate eventually.
Can I perhaps test you on whether that remains your target still post however long it takes for these rectification works to happen? And then secondly, on Kwinana, in terms of Train 2 , is it fair that despite the feed study continuing, you probably want to wait to see Train 1 completely ironed out and running at a decent run rate before you give the green light for Train 2 ? That's my question on Kwinana. I'll come back with a question on Greenbushes. Thanks.
Okay. Thanks, Rahul. Look, the nominal nameplate, from an engineering point of view, stands until we've done that work on that model to really understand it, simulate it. I think it's difficult to be making up a number. So we'll clearly chase that engineering outcome. And then once we know more, we can adjust it if need be. I think I mentioned in the previous call that there is, of course, a scenario where it may be that you need the two trains together and some buffer or some redundancy between the two of them to actually get the optimum outcome, and that would then imply some reduction from the total nameplate of both trains to achieve that. Again, I'm speculating because it's too early to tell. Those are things that the team are looking through in their engineering and feasibility study currently.
The target this year is not impacted by either of those things. They're working through the current bottlenecks and where the performance is impacted. Remember, of course, the tons we produce through the year is a cumulative view, and we expect to see a good step up after that shutdown in September. So the last quarter is where we're going to see then, obviously, a more material output based on the success of those changes. The second part of your question around the confidence and the trigger for anything on Train 2 , yeah, look, clearly, we need to know that we've got a pathway to an economic and valuable asset before we invest further capital. We need to understand what the return would be accordingly, how far you've got to be along the way to prove that. I think, again, it's open to some debate still.
That's why I'm so hesitant to put out numbers at this point until we've seen that digital model, until we can see a level of confidence in our ability to forecast performance month-on-month. I just don't think it's worth getting into what that line looks like. But you're quite right that there will be a close link between the performance of Train 1 and any decision on Train 2 . So that stands as a question of what that threshold looks like that I still can't tell you.
Oh, okay. That's fair enough. Look, second one's on Greenbushes. Obviously, pleasing to see the mine return to full production for the rest of the calendar year. I wanted to check whether there's been any further color that you can add in terms of the mine plan and sort of the Tianqi plan for the medium term that we were talking about last quarter as well, and we were somewhat expecting an update this quarter. It may still come in June, but all I wanted to test was perhaps future expansions beyond CGP3.
Is it fair to say that the mine's footprint and capital requirements could be constraining factors, and you probably want to look at the underground options? And it might be a cost or a capital-light strategy over a capital-heavy, higher operating cost strategy in the medium term, especially given strip ratios and where they need to be if you're going to mine at those sorts of rates?
It's a lot in that question. Sorry about that. Yeah, you've got something else you're chasing. Look, first of all, let's talk about expansion. So the CGP3 is progressing. That's moving along well. We'll be done mid-next year, Q3 next year. So that's step one. There's been no sort of change to that schedule or delay of that slow or anything. I mean, it's just running at full pace. It's incredibly value-increasing and makes a lot of sense. Behind that is CGP4. What we said last quarter is, look, that still remains in study mode. Once we see that, we can look at that. Clearly, that needs to be done in a way that's cognizant of the mine's ability to support it and how that's optimized. Then that brings you, obviously, to how you expand the metal body over time.
I think we've, again, signaled that it's likely that underground mining methods will be appropriate to supplement the surface mining that we've been doing so far. Exactly how and when is not determined yet. It's not something I can get into. But that's the work that we need to do. Having a plant built without having thought through the mine and its capacity to feed that, tailings management, etc., just doesn't make sense. So all of that's going to come into that decision as we look forward. And I'm sure you take all that for granted. I think I'd stand back, though, and say, look, while we both know that every mine has got some sweet spot at the rate it can run at, equally, when you have the cost position and the ore quality or material quality that we get from Greenbushes, then we want to maximize that.
We want to maximize production, and we want to meet the significant growing demand we see in this market. So there's a clear intent to bring the very best and highest margin tonnes into the world as quickly as possible ahead of other investments that might be out there in the industry. And that's certainly the way I look at it. But we need to make sure that final step with CGP4 is done on the basis of not just the plant capital expectations but also the mine and related infrastructure as well.
Understood. Look, that's all my questions. Thank you very much. I'll pass it on.
Thanks, Rahul.
Your next question comes from Jon Bishop with Jarden Australia. Please go ahead.
Thanks for taking my questions. I'll try and keep it to two. Just around your nickel strategy, obviously, you've taken, obviously, a big haircut on the Western Australia's acquisitions, and you've had to put Cosmos on care and maintenance. I did notice nickel junior the other day announcing a joint venture partnership with a Japanese consortium on a nickel laterite, admittedly. But I guess I'm interested to understand, given that sort of geopolitical bent, are you seeing any emergence of ex-China interest in those assets?
Jon, good year, good question. I'm not, personally. I can't really comment more broadly, but I guess my replacement on the nickel industry, if I could just broaden out your question, is that China, obviously, has got an interest because of their same steel production, and that's significant in terms of demand. They'll continue to pursue the lowest cost nickel units they can get, and they've got lots of expansion opportunities in their other locations around the world. So I'm not sure what if you're thinking about an incentive to operate here, it's hard to imagine that we'd see a big shift from their other options.
Yeah. Okay. I guess I was just flashing at to see whether you'd started any sort of sale process, but I'll park that there. Probably the other question I have for you is just around the reserves and resources at Talison that you announced with your December quarterly results, and then, obviously, Albemarle have announced independently. There was some disparity between those numbers. I guess it probably ties into Roel's question around underground and CGP4 decision-making. I think the market had an understanding that CGP4 was predicated on a continuation of open pit, and then, obviously, underground would be part of a longer-term strategy. Is that something you're able to sort of definitively call out at this point, or is it still part of your optimization work?
No, that's still work to do. I mean, I think when the underground comes in, it should be optimized on the cost, of course. And if we don't build a plant for five years, obviously, they're going to run for a long time. So we've got to think about it in the near term and well beyond that. And the difference between the Albemarle report and, of course, what we released from Talison is just different reporting standards, which I'm sure the market's across from other businesses as well, the difference between JORC, SEC regulations in terms of how reserve and resources are reported.
Right. Thank you very much for taking my questions.
Your next question comes from Tim Hoff with Canaccord. Please go ahead.
Thanks, Faiza. Might dive straight into that one. I guess the differences between Albemarle and your reporting, you've noted that it was a conservative differential between the two, and that's why we see what we see in terms of that mine plan that was put out. Can you dive into what specifically is conservative about it? I mean, obviously, we have no TRP. There's no underground, but you're not advising to an underground either. Can you dig a little bit more into what those differences are?
Tim, I couldn't hear you super well on that, but it sounds like you're looking to break down or reconcile the differences between the two reports, which is not something I think is a great plan to do. Paul, now we can catch up and go through that if you like. But there are different standards of reporting in terms of certainty around the resource. There's difference in price assumptions. There is difference in cost. There's a number of different factors that ultimately roll back into those two different outcomes, which Albemarle reported to versus what Talison reported to. So I don't know what are you chasing with that question?
Just if you can outline what the differences are between the conservative nature. But we'll move on. Just looking at the Windfield accounts, there's a large differential of about AUD 3.5 billion between the non-current assets of TLEA, the Tianqi Lithium Energy Australia JV, and Windfield. Can you give a bit of information about what that might be? Is it just the cost of Kwinana that's on the balance sheet, or is it additional assets or goodwill being held on the balance sheet of the Tianqi Lithium Energy Australia JV?
Look, honestly, I couldn't tell you off the top of my head because I don't have two sets of accounts in front of me. It might be better if we do that one offline. I don't want to mislead you with some incorrect information on that one.
Okay. Well, we didn't have too many hits on those ones. Perhaps the quick one was no, that's all right. We'll follow up. And then perhaps lastly, if I may, the sprint rate of logistics at Greenbushes. Obviously, 200,000 tonnes is a great outcome for the operation. What's likely to be cleared out within a quarter?
Look, we'd love to hear all of it on the ship. I mean, I can't speak to the shipping and port constraints, but I mean, there's an interest to get. If you could do one big shipload, that's what's happening today. We could bring a big cap size down, and we saw that take it in one go. So it's not like there's any delay, or it's purely as fast as we can get the ships in and out.
Excellent. Thanks very much, guys. I'll hand it on.
Thanks, Tim.
Your next question comes from Levi Spry with UBS. Please go ahead.
Yeah. Good day, Ivan and Team. Maybe just following on there a little bit. So, stockpiles and sales for this quarter. Can you confirm what the stockpile was at the end of the quarter? And I think previously, you've said sales would be 20% below production. Is that still what we work on for this quarter?
Look, I think stockpile March 230, roughly, is what's in my mind, 230 March, something like that. So we'll largely clear that, give or take a bit of working inventory. And look, sales were 180, from memory. Adequate? No, I'm sorry. I was delivering Greenbushes.
Oh, I think you've seen us. It's going to be you just need to add the 300,000.
Nominations for this quarter.
Yeah. Yeah. So nominations for this quarter were fairly full. So you actually.
Oh, it's fairly unfair for this quarter. Yeah. Even for the last quarter, Levi no, so we saw nominations, obviously, across the half being lower. We said it's about 20%, but the bulk of that was effectively impacting the first quarter of this calendar year. And so when you think about the offtake that was booked already for this second quarter or June quarter, plus 200,000 tonnes, that's been flat out.
Okay. Thanks. I'll follow that up. And then just on the 200,000 tonnes, can you explain to us a little bit around the nomination process for that? And I guess the 180-day payment terms, you talked about recognizing the value of getting that out, but also the, I guess, in-the-money option on the pricing mechanism. So spot price is $1,200. I assume this is going to be sold at the March average price. Yeah. How do we think about that in the cycles of prices going forward, up and down?
Yeah. So look, this is outside the nominations. Both JV partners put their name in the hat earlier this year, and they stand, and they will nominate for Q3 in a little while. So that process is unchanged at this point. This 200,000 tonnes is in addition to that to draw down in the inventory, which obviously has a lot of benefits. You're right in terms of pricing. They'll draw at that March, also M-1 March pricing in terms of the order that they've placed. And I think the invoice that is, look, is that attractive for them in a differential to the spot price today? Sure, potentially. But the spot price today is fairly much 200,000 tonnes. So I'm also not sure that it's necessarily comparable on that basis.
Yep. Okay. Thank you. And maybe a quick one on just on CGP3. So you confirmed the timing, September 25, I think. The CapEx is going a little bit slower there than maybe how is the rate of spend, I guess, going on the project?
Yeah. Look, it's moving, and you've got to separate out normally purchases and different rates of activity when you're doing piling versus all the big build that's underway now. So it's difficult to say, well, based on the spend and trading cap and tracking, I'm looking at actual progress. And while they've had some delays in the piling, they're definitely moving at pace now, and I think running to schedule, albeit taking into account that delay. We're still not expecting this to play into a significant overall delay in the project, though, which is why we're still talking about that third quarter next year.
Okay. Thank you. Thanks, Ivan.
Your next question comes from Robert Stein with Macquarie. Please go ahead.
Hi, Team. Thanks for the opportunity. Just a quick one on the Kwinana profitability. So obviously, with the negative EBITDA result impacted by the NRV, can you give us an indication of what that would have been without that NRV? And then secondly, can you talk to potential utilization rates? I know that you said that you don't want to comment on absolute production, but can you just talk to how you're expecting the sort of utilization rate to grow post that shutdown that you're going to have in the September quarter? Are we expecting a pretty sharp increase, or are we going to expect it to be very long and protracted? Thanks.
Oh, and as part of that, Robert, the profitability there, I think it's about a quarter of that or just over a quarter of that is an NRV adjustment. So that will enable you to calculate how much was the fund rate for the quarter. Hopefully, that answers your question. Thank you.
And then, Robert, on the utilization, yeah, we expect a decent step after that chart in September. I'm not getting the specifics, but you can look at the run rates and average it on the production you've seen the last few months. They were sitting just over 20% through April, which is great, having less of those zero days when they have outages, which is promising. And as I said, we'll continue through the plans to continue through that shutdown with steady operational and reliability improvements and then have, obviously, a step up based on the asset changes coming out of the shutdown.
Great. So, Ivan, just a follow-up there. So we're expecting this to be an availability, utilization, or rate improvement following the September shut or all three?
It's both. I'll try and give you some specifics just to try and make it a bit more tangible. One of the issues they identified was the amount of lithium hydroxide that's recirculating effectively. So we're producing hydroxide but not extracting it, crystallizing it, pulling it out. And so that's effectively the rate, which they've identified some of the issues that they can reduce that issue. They're also going to do things which will affect availability or improve availability. In other words, reduce the unplanned outages that they've seen through the asset. So it's definitely a combination of both. And sorry. Sorry about that. One I shouldn't make. Sorry to jump in again. I'm still learning as I go on these assets and the refining process, but no surprises, and I think this is the case for any sort of heavier processing.
The stability of the plant's is also key in the production overall. When they have a lot of outages, you never actually get your rhythm up. What we saw through Travis was they started to get extended periods without those outages, and that in itself helps the overall stability of the plant and the production rate as well. That's a huge part of the focus now up till the shutdown because the learning that they're doing through that and the stability they achieve, well, obviously, then is amplified when they make some of the asset remediations or modifications in the shutdown.
Thank you very much for that added color.
Your next question comes from Kaan Peker with RBC. Please go ahead.
Okay. In case, two questions from me. The first one's on Greenbushes. Can you maybe provide some further detail on that approvals process for TLC, how that works, and why April 29? And given that prices have increased this quarter and TLC has taken up beyond their allocation, does that mean that they won't take up allocation next quarter and maybe some timing around that? Thanks.
For the decision? Okay. Maybe to head off the last thing first, to look at this is unrelated to the normal nominations process. They'll go through that normal exercise. We certainly don't expect. I'm not going to give you the details, but we certainly don't expect there to be then a short nomination in Q3 to offset that. This is above and beyond. It's the clear inventory, and I think a great signal from TLC pulling that through. It's been welcomed by all three JV partners. The decision-making process ultimately goes through the Windfield board. So TLC made that request. That was then considered by the two JV partners, TLEA and Albemarle, and it went through quite a bit of analysis and process and ultimately a decision to accept that order on those terms.
Acceptance was well received, but making sure that this was lined up with the rest of the plans for the business.
Sure. Thanks. And maybe the second one is on Nova. Can you provide a bit more detail around Nova? It just seems like we've pushed out sort of that high-grade stope for the last few quarters, and now there's an additional mill shutdown. When should we see Nova grades get back and sort of the operation throughput get back to what it was doing sometime early last year?
Thanks, Kaan. Good question. And we've just talked to Appy for a minute. You say your operation's spot on. You're very close to detail, and they are basically moving into some of those high-grade stopes, as we speak. They had an issue with a boiler that was in the wrong spot. They had to move a few days ago, and that opened up a new sequence. So we're looking forward to seeing that come through this quarter.
Is it likely 2025?
No, no. I mean, we'll see that grade start now, basically. So from beginning of May, that is going to start feeding into the mill.
And the mill's up and running?
Yeah. Yeah. The mill's running. In fact, it's running at high rates. It seems certainly, they had a bunch of challenges last quarter. They were frustrated, and I think it's never easy. For us, we're sitting back here looking from a distance, and you go, "Can we go faster?" But they had a lot of challenges to work through, and I give them a lot of credit for the way they managed that work. It's frustrating that they're now in a place where they've set themselves up for what will be a very strong quarter record. That's certainly their plan, and it all comes down to pushing that mill to higher rates than it would used to be running.
Sure. Thank you.
Your next question comes from Mitch Ryan with Jefferies. Please go ahead.
Morning, Ivan and Kath. So dividends from the TLEA were paused in the December quarter pending finalization of calendar year 2024 budget and operating plan. Given the AUD 25 million dividend during the quarter, can we assume that that budget and operating plan have been finalized, and can we get any color on what that looks like?
So just to clarify, you're asking about what potential dividends could look like going forward?
No. The calendar year 2024 budget and operating plan sitting inside TLEA.
Okay. It's been continuing to be reviewed, and it should be signed off in the coming weeks, is my understanding.
Okay. So the dividend resumed prior to that being finalized?
Yes, it did.
Okay. And then just with the election from TLEA to take the additional 20,000 tonnes, are there any logistic constraints in trucking that to port, given that will be sort of a step up relative to prior operating rates?
It's a great question. I'm not sure the specifics. I mean, obviously, they've moved the volumes at scale before. I can't comment on exact port constraints and the rate trucking to get into it. We're pushing the team at Talison to get those tonnes out as soon as possible. Everyone's got that common motivation. I guess we can give you some more specifics if that's helpful, but our aim is to have all those tonnes cleared this quarter.
Okay. Thank you for taking my questions.
Your next question comes from Daniel Morgan with Barrenjoey. Please go ahead.
Hi. Ivan and Tim. Sorry to come back to this, but it just seems incredibly opportunistic that it was decided yesterday that TLEA can take 200,000 tonnes of spodumene at March prices and with 180-day payment terms. You do have a great asset, but there is market concern that under your ownership structure, Tianqi can shave revenue or cash flow from you in good times and bad. How do you comfort shareholders about this structure and that it will work for IGO shareholders through the cycle? Thank you.
Well, I think we've had a lot of comment and speculation about how the JV functioned over the last few months, which we've been trying to work through to provide more transparency on capital structure and in decision-making. I see this as a tremendous positive. I mean, they had a fairly somber and negative view looking into 2024 and putting a low nomination. Obviously, that had an impact on production, and we had a long conversation about that. We won't go over that ground again. They've taken a view now to pull these tonnes out. Again, I can't comment on the specific decision-making, but I think that's healthy. The timing, of course, is favorable in the sense that we are seeing some rise in the dip in price, and they'll be taking these at that low end. But I sense the suspicion around them, around TLC's decisions.
I don't know that that's fair and reasonable. Albemarle's, obviously, party to this as well, and they equally stand back with their own half of the asset and are party to these decisions, and they're encouraging and welcoming this sale and clearing these tons. If I look at your question from another perspective, the opportunity that I see is, of course, thinking about the nominations process when we're in a slower period of market demand because what we don't want to do is impact the way we run the line. We want to optimize that, optimize its costs and its performance. And that's just the sort of thing that I'm interested in spending more time talking about with the partners trying to solve for that and improve the way that we then plan to optimize that operation.
But beyond that, I think we're talking about the swings of normal supply and demand through a pretty difficult change in the market environment. The lithium price came off massively over the last nine months, and there's been a bunch of adjustments through the whole industry because of that.
Thank you. And maybe further to this, just on the operational plan, I mean, if I'm reading correctly from the presentation releases, this will enable Greenbushes to return to full production. Is that what you'd envisage at the exit of the June 2024 quarter? Thank you.
Yeah. Yeah. That's right. And obviously, give us some real flexibility there up and running at rate now, but we can't crystal ball what the back end of the year looks like. The point is we don't have a full inventory stockpile at this point once this is cleared. And so in the worst case, we've still got that buffer if we needed it, but we're not seeing any indications that we're even going to need that right now. It's about just getting that line running at full rate and driving the cost back down.
Okay. Thank you so much for your perspectives.
Thanks, Dan.
Your next question comes from Kate McCutcheon with Citi. Please go ahead.
Hi. Good morning, Ivan and Kath. Just following on from Mitch's question, the resumption of TLEA dividends. From the last lot of disclosures, I think there was still a few hundred million AUD of cash sitting in the TLEA accounts. You've got 25 million AUD of the dividend this quarter. Does that resumption mean that did you say that you're still working through the budgeting process, or is there more clarity on Kwinana? And do we assume dividends resume from here out? Interim dividend ?
Well, let me comment, Kath, if you can build on. I mean, look, yeah, without being specific on the numbers, we shared it at half the cash position at both TLEA and at Talison. And the cash at Talison has grown as well. You could calculate. We won't mention numbers, but it's material bundle of cash there. The budgets are done. We're busy in that final sign-off, and I think we've got a view of what the year looks like. In terms of the dividend flow, that's still a decision to come, but there is still a considerable amount of cash that's accrued in both entities. As much as we want to have confidence that we can cover any expenses in both cases, we also don't want to leave cash sitting there. So the sort of process that we're used to, I expect we'll be able to reinstitute it in due course.
Yeah. I've got nothing to add to that. Just as Ivan indicated, the cash has grown at Greenbushes, Talison. And in terms of the debt profile, it's remained fairly consistent.
Yeah. Got it. Yes. My question was on the TLEA account, so. I mean, you can back out how much cash is sitting in there, and you've got sitting in that.
Yeah. They're kind of linked front. So the cash generation is obviously coming from Greenbushes. Kwinana is still obviously a cash drawer at this point. And as long as we've got cover for that based on our production base at Kwinana, that obviously gives us a view of what we can then release as it flows out of Talison.
Okay. Thank you. And then Cosmos. I hadn't quite appreciated the cash still to go into that asset, both the quarter passed, well, the March quarter and the quarter to come. Is the end of this FY the end of that chunky spend on Cosmos, and how should we think about any care and maintenance expenditure going forward?
So we made the decision on the Cosmos at the end of January. So if you think about the cash that we paid, it was actually paying for December and January, and we went into a period of care and maintenance. It was an organized situation. So that's a reflection of the tail of that move. In respect to the next quarter, you need to think about we continue to mine. We finished mining this month. We will still continue to process until end of May in order to realize the value from the stockpiles, as well as there'll be some redundancy that's happening there. So that's the tail that we've got while we move into care and maintenance. We've guided that care and maintenance will be between AUD 12 million and AUD 15 million per annum going forward.
I think it's safe that that'll mean somewhere in the June month, so you could forecast that from the end of the next quarter.
Okay. Thank you, Kath.
Your next question comes from Matthew Frydman with MST Financial. Please go ahead.
Sure. Thanks. Morning, Ivan and Tim. I had a question on Kwinana, and you cited in the release the ongoing qualification processes and contract discussions. I'm just interested to understand what's driving that. I mean, Kwinana's been producing battery grade for two years now. My understanding was that you had long-term offtake customers in place. So yeah, just trying to understand what qualification is still taking place. Is that seeking new customers, new contracts? And just trying to understand, I guess, what the JV is seeking in terms of those new contracts. Is it additional volumes, new geographies? Yeah. What's driving that ongoing process? Thanks.
Matthew, thanks. Good question. So it's just new customers. Obviously, we've had a couple that I think TLC mentioned in their results call, which have been taking product already will qualify more customers, and that just gives us more pathways and more options as the production grows.
Okay. Thanks. Have any of the pre-existing offtake contracts that you guys have previously cited, have any of them expired or been terminated for any reason? It's purely just trying to build out the customer base on top of some of those that you've already highlighted. No. It's just building it out.
Yeah. It's just building it out on top of those. They're still current, albeit probably delayed in terms of the expected offtake, but they're still there, and they're taking product now.
Understand. If I could just ask another quick follow-up in terms of the process around the additional 200-kilotonne sale. Obviously, we've covered a lot of ground there, but TLC were the ones that requested the volumes and obviously have been given the sale. Does that imply that IGO could also unilaterally request to take an additional cargo above any nominations in the quarter in the future? Is that something that you would ever look to do, I guess, particularly if you see similarly favorable pricing terms or if you were interested in picking up a shortfall in the allocations? Would that be a possible outcome?
Yeah. Not under the current agreement. So at a Windfield level, the way that's structured, the Talison is a sales to those two offtake partners, Albemarle and TLEA, and that flows back-to-back to TLC. So yeah, not under the current terms.
Okay. Understand. And sorry, can you also remind me, under the terms of those sort of sale agreements, does the buyer have to use that material internally, or are they allowed to toll-treat it or sell it externally to a third party? Is that within the scope of the agreement?
They can and do toll-treat it. The process for their needs, I guess, is effectively what the agreement requires, so.
Okay. Understand. Thanks.
And obviously, both Albemarle and TLEA doing that.
Okay. Thanks for that clarity, Ivan. Cheers.
Thanks, Matthew.
Your next question comes from Lyndon Fagan with J.P. Morgan. Please go ahead.
Good morning, everyone. Ivan, just going back to that technical report, are you able to bridge the gap as to why the strip ratio's gone up and the grades have gone down relative to the previous technical report? Just trying to understand that.
Is it the overall mine or just current performance?
No. This is the total mine plan at Greenbushes that was released to market, just trying to reconcile why there was such a big change.
I can't off the top of my head. I'm happy to get back to you on that if that's helpful. But no, I don't think that's the entire case.
No worries. And then just to be crystal clear, so Greenbushes is now back at running at nameplate. There's no intention to throttle back sales relative to production. That's how we need to frame it going forward. Is that right?
Correct.
Great. That was all I had. Thanks.
Brilliant. Thanks, Lyndon.
That concludes our question-and-answer session. I'll now hand back to Mr. Vella for closing remarks. Great.
Thanks, Ashley. Look, we're right on time, so I won't say too much while. Thanks for your time. Great questions. Obviously, some new news around the 20,000 tonnes. I think that's fabulous for the business and a great sign for Greenbushes for the rest of the year. There's plenty of work to do there, as you've all noted, as we've looked to grow and optimize that business. The other key highlight, I guess, worth talking about is the forward plan on our Kwinana refinery. It's really great to see the clarity the team's got and the way they're looking at that. Thanks again. I look forward to talking to you all again at the next quarterly, if not before. Thanks for joining.