Fire knocks out IGO's Nova nickel mine

Company News

by Glenn Dyer

Perth-based resource company IGO (ASX:IGO) has suffered a major hit from a fire that will put its Nova nickel mine out of operation for several weeks.

The company said on Sunday that a fire at a power plant attached to the Nova operations will see the plant offline until early 2023 with a target date of mid-January.

The fire damaged the 10-megwatt diesel power station owned and operated by IGO’s partner Zenith Energy.

Operations at the Nova site in Fraser Range of WA (north of Esperance) have since been suspended and non-essential workers have been sent home.

IGO is currently working to restore power, but anticipates that process could take several weeks.

Media reports at the weekend said hundreds of workers at the mine were evacuated after the fire broke out early Saturday morning.

WA media said that IGO acting chief executive Matt Dusci had indicated that while the fire would hamper operations, the company was thankful its personnel were safe and unharmed.

A probe has been launched to establish the cause of the fire. The mine is one of the company’s key nickel production assets.

Nova produces nickel, copper and cobalt and in the three months to September reported underlying earnings before interest tax depreciation and amortisation of $132 million, down 32% on June quarter.

That was marginally above the $121.5 million reported in the September, 2021 quarter.

Revenue fell 27% to $202 million, but was sharply higher than the $189.2 million reported for the same quarter of 2021.

IGO shares closed up 2% on Friday at $16.34. They jumped 8.5% last week with the rise in world copper prices.

The financial impact on IGO won’t be felt to the March quarter – the company has stocks of ore and metal from the mine but coming so close to the end of the second quarter and the first half of 2022-23, IGO’s interim results shouldn’t be impacted too much.

IGO is expected to update the market as early as today (Monday).

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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