A strong focus on expansion and growth Outlook During FY23, the focus at Greenbushes will be on commencing the construction of Chemical Grade Plant 3 (CGP3) and continuing to expand the infrastructure required to support higher mining and processing rates into the future. At the Refinery, the Operation teams priority is to continue to safely ramp up production from Train 1, while preparing for a final investment decision on the recommencement of construction of Train 2. At a Glance IGO is invested in a world-class, fully integrated lithium business Spodumene concentrate production from the Greenbushes Operation delivers high quality, reliable feedstock for the Kwinana Refinery Significant growth potential within the lithium business via processing expansions at both Greenbushes and the Kwinana Refinery FY23 spodumene concentrate production expected to be 1.35Mtpa to 1.45Mtpa1 with cost of goods sold (excluding royalties) of $225 to $275/t 1. 100% basis LithiumBusiness Tianqi LithiumEnergy Australia Joint Venture (TLEA) IGO’s lithium business is held via its 49% interest in TLEA, an incorporated joint venture with Tianqi (51%). TLEA owns and operates an integrated lithium business which includes a 51% interest in the Greenbushes Operation and 100% interest in the Kwinana Refinery, both located in Western Australia. IGO’s investment in the TLEA joint venture formally commenced on 30 June 2021, at which point, IGO’s Managing Director and CEO, Peter Bradford and Chief Operating Officer, Matt Dusci, joined the TLEA Board of Directors, while Peter Bradford also became a Board member of the entity which manages the Greenbushes Operation. IGO maintains strong minority shareholder protections through these Board appointments, as well as our high levels of interaction with operational teams at both Greenbushes and Kwinana. As a non-controlling shareholder in TLEA, IGO recognises its share of net profit from TLEA in its consolidated financial statements within Underlying EBITDA. IGO’s share of net profit from TLEA for FY22 was $176.7 million. Pursuant to IGO’s position as a non‑controlling shareholder in TLEA, IGO is required to amortise the provisional accounting fair value adjustment of $1,147.5 million, that forms part of the carrying value of IGO’s investment in the lithium joint venture. IGO recognised $28.7 million of amortisation charges against its share of net profit from TLEA in FY22. Greenbushes Operation Project Overview The Greenbushes Operation is operated by Talison Lithium, an incorporated joint venture owned by TLEA (51%) and Albemarle (49%). Greenbushes is a large-scale, long life, low cost, hard rock lithium mine located approximately 250km south of Perth, Western Australia, and has the highest ore reserve grade of any operating hard rock lithium mine globally. Greenbushes is a well-established mining and processing operation with first mining activity commencing in the late-1800s and lithium operations commencing in 1983. The site comprises a large open-pit mine, four processing plants – three producing chemical grade lithium concentrates: Chemical Grade Plant 1 (CGP1) and Chemical Grade Plant 2 (CGP2) and the Tailings Retreatment Plant (TRP), one producing technical grade lithium concentrates, Technical Grade Plant (TGP), and associated support infrastructure. Greenbushes is the world’s largest lithium mining operation and in 2021 accounted for 38% of the global mined lithium output. With demand for lithium increasing rapidly, Greenbushes is embarking on a significant expansion of mining and processing capacity and will remain a globally significant lithium operation over a long mine life, currently expected to be more than 20 years. In FY22, the Greenbushes team has safely overseen significant expansion of processing capacity and is preparing the operation for further expansion over the next several years. Greenbushes had a successful operating performance for the year, delivering on both production and cash cost guidance. Total spodumene production was 1,135kt, significantly higher than previous years. Unit costs of goods sold excluding royalties, which comprises the costs of producing and selling spodumene concentrates from the mine site and includes credit adjustments for tantalum sales, were $238/t of spodumene concentrate sold, an excellent result given the inflationary cost pressures impacting the mining sector. The increase in spodumene concentrate production was delivered through the commissioning and range of CGP2, and the construction and commissioning of the TRP. The TRP is designed to reprocess 2Mtpa of old tantalum processing tailings from Tailings Storage Facility 1, which has an average spodumene grade of 1.4% Li 2O. Nominal production from the TRP is expected to be 280ktpa for a period of five years, with nameplate capacity expected to be reached in FY23. Kwinana Lithium Hydroxide Refinery IGO ANNUAL REPORT 2022— 29
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