IGO share price slides as fire incident overshadows commercial lithium production milestone

Most lithium stocks are gaining today on news that China is rolling back its zero COVID policies.

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Key points
  • The IGO share price is down 1.7% in morning trade
  • The ASX lithium miner reported commercial production from Train 1 of the Kwinana Lithium Hydroxide Refinery
  • IGO’s Nova Operation was hit by a fire on Saturday, with mining operations now suspended for approximately two weeks

The IGO Ltd (ASX: IGO) share price is in the red, down 1.77%, after the lithium miner reported both positive and negative news this morning.

IGO shares closed Friday trading for $16.34 and are currently changing hands for $16.05 apiece.

This comes following the release of two price-sensitive updates from the S&P/ASX 200 Index (ASX: XJO) lithium stock.

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.

Image source: Getty Images

What did IGO report?

In news likely to offer some tailwinds for the IGO share price, the company reported that Tianqi Lithium Energy Australia declared commercial production from Train 1 of the Kwinana Lithium Hydroxide Refinery, effective 30 November.

Tianqi Lithium Energy Australia is the joint venture between IGO (49%) and Tianqi Lithium Corporation (51%).

IGO said this reflected "confidence in the capability of Train 1 to operate continuously and produce battery-grade lithium hydroxide".

Train 1 will continue to ramp up production through 2023. Negotiations with potential off-take customers are ongoing.

In separate news, which looks to be dragging on the IGO share price today, the lithium miner reported it has temporarily halted all operations at its Nova Operation due to a fire.

On Saturday, a fire broke out at the 10MW Nova power station, owned and operated by the IGO's power partner, Zenith Energy Pty Ltd. The fire was contained to the diesel engine room, which suffered extensive damage.

IGO reported that there were no injuries and all its personnel were safe. The miner is working with Zenith to get the power back online. It expects to be able to restart mining operations at Nova in two weeks. Restoration of the full power supply needed to run the processing facility will likely take four weeks.

Commenting on the fire, IGO's acting CEO Matt Dusci said:

While this incident will result in the Nova operation being offline for several weeks, we are thankful that all of our people are safe and unharmed. I am also grateful to our Emergency Response Team for their quick and professional response and for restricting the fire to the engine room.

We have activated our contingency plans and are working closely with Zenith to re-establish operations at Nova as quickly and safely as possible.

IGO share price snapshot

The IGO share price has benefited from soaring lithium prices over the year. Over the past 12 months, IGO shares have gained 60%. That compares to a 1% full-year gain posted by the ASX 200.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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