Why fund managers rotated into IGO's Greenbushes lithium exposure

IGO's stake in the world-class Greenbushes lithium mine rode a dramatic price recovery, before a plant fire and production downgrades tested investor patience.

15 Jun 2026 · 6 min read

Lithium producer IGO has ridden a dramatic lithium price recovery through its 24.99% interest in Greenbushes, described by Oracle Advisory Group's December 2025 Quarterly Report as probably the single best lithium mine in the world, before a June 2026 fire at the newly commissioned Chemical Grade Plant 3 introduced fresh operational uncertainty just as the recovery was gaining momentum.

A spodumene price surge lifts the lowest-cost producer

Ellerston Capital's December 2025 Monthly Report detailed the scale of the price move driving IGO's rally: the spodumene price rose from US$1,150 per tonne to US$1,575 per tonne in a single month, a 37% jump, driven partly by concerns that CATL's Jianxiawo lithium mine in China would not resume production until around Chinese New Year, later than previously expected, turning a widely anticipated 2026 oversupply into what increasingly looked like a deficit. Spheria Asset Management's own December 2025 report noted the spodumene price had risen more than 60% since the start of November and over 85% for the calendar year, with SQM upgrading its global lithium demand growth forecast to more than 25% from 17% previously.

That business has the lowest cost hard rock lithium asset in the world, Greenbushes, and they own a quarter of it. That's a really high-quality asset. It was bought when lithium was on the nose, and now it's come roaring back and that business has nearly tripled over the year.

— Airlie Funds Management, Webinar, January 2026

The operational picture proved less smooth than the pricing tailwind. Pendal Group's April 2026 Newsletter detailed a weak third-quarter FY26 update in which Greenbushes' FY26 production guidance was downgraded 8-14% and cost guidance raised 17-23%, citing systemic issues including lower grades, safety performance, recoveries and maintenance, with limited visibility on when these would be resolved beyond a promised new mine plan due in the September quarter. Pendal's June 2026 report then detailed a fire at the recently commissioned, A$0.9 billion Chemical Grade Plant 3, with an outage of at least several weeks likely and FY27 guidance at risk given the plant's nameplate capacity of just over 500,000 tonnes per annum at IGO's 25% effective interest.

What managers are watching next

Airlie Funds Management's January 2026 commentary detailed rotating out of Mineral Resources and into IGO specifically for the quality of the Greenbushes asset, a switch that had already seen the position nearly triple over the year by the time of the report. With Pendal Group noting free cash flow yield should pick up to high single digits as capital expenditure rolls off from the completed third concentrator build, and insurance expected to cover some of the CGP3 fire repair costs, managers are watching whether the promised new mine plan can finally restore confidence in Greenbushes' operational consistency.