Cosmos Nickel Mine Suspension in Response to Falling Prices

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IGO, a mining company, has announced that it will be suspending operations at the Cosmos nickel mine in Western Australia due to a significant decline in the price of nickel. In addition, the company anticipates writing down the value of its nickel operations by as much as 190 million Australian dollars (US$125 million).

Following a review that revealed a decrease in the expected lifespan of the mine and rising operating and capital costs, IGO has decided to place the Cosmos mine into a state of care and maintenance by May 31. It is expected that the majority of the write-down, approximately A$175 million, will be attributed to the Cosmos mine.

The declining prices of battery metals, including nickel, can be attributed to a lack of demand from electric vehicle (EV) manufacturers. As a result, numerous mining companies have expressed their intentions to reduce production and cut costs in order to weather the current industry downturn.

“Our industry is currently facing significant challenges and uncertainty, particularly within the nickel and lithium sectors as they experience a downturn in the cycle,” stated Ivan Vella, CEO of IGO.

In response to these challenges, IGO has taken the necessary steps to respond and adapt to the changing market conditions, safeguarding their operations during this period of volatility.

IGO’s Approach to Resource Preservation at Cosmos


At IGO’s Cosmos project, there is a strategic focus on preserving resources that may be mined in the future if market conditions become more favorable, according to Vella, a representative of the company. While considering the continuation of certain exploration programs to enhance the known mineral resources in the area, IGO acknowledges the need for caution due to operational and financial risks present in the current environment.

Adapting to the Nickel Market

Although not the desired outcome for IGO, Vella emphasized the importance of addressing both operational and financial risks associated with further development at Cosmos. In light of the nickel market’s challenging conditions, the company recognizes the need for disciplined allocation of capital. Nonetheless, IGO still believes there is significant value in the Cosmos project and aims to retain the flexibility to potentially restart operations if market conditions improve.

Workforce Impact

While some workers may be redeployed within the company, other roles may become redundant. IGO did not provide specific information regarding the number of affected positions.

Acquisition of Forrestania and Cosmos Assets

IGO acquired the Forrestania and Cosmos assets as part of its acquisition of Western Areas in June 2022. Alongside these additions, IGO already possessed a nickel operation known as Nova.

Positive Performance of Nova and Forrestania

Despite the current market conditions, IGO expresses satisfaction with the positive cash flow generated by its Nova and Forrestania assets.

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