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OPERATIONAL REVIEW
DIGGeRs & DeALeRs PReVIeW MACA.NET.AU

IGO takeover brings end

to Western Areas era

IGO Ltd received shareholder and court approval for its acquisition of Western Areas
Ltd in June, bringing an end one of Australian nickel’s most successful recent stories.

he $1.26 billion deal will see Western Ar-
Teas absorbed into the wider IGO group,
setting the expanded company up as Aus-
tralia’s most prominent clean energy met-
als producer with interests in three nickel
mines, one lithium mine and a downstream
lithium hydroxide facility in its portfolio.
While the merger delivers IGO share-
holders answers to pressing questions
about future nickel reserves, for alI Western
Areas stakeholders, it is the final chapter in
a 22-year story which saw it build and main-
tain a robust nickel production profile dur-
ing the most volatile period in the sector’s
history.
Outgoing managing director Dan Lough-
er was with the company for 17 of those
years and recently sat down with Paydirt to
chart the company’s colourful history.
For Lougher, it was amid the market vola-
tility that the company proved its mettle. Dan Lougher
“When the nickel price came through Flying Fox orebody at its Forrestania opera-
really strongly in 2006/07, our share price tions in WA. The nickel price fall had made all that market volatility, we didn’t lay peo-
hit $12, and the company was flying. But the deep-level underground mine marginal ple off and we didn’t miss guidance for 10
then, when the price dropped below $US4/ and with reserves dwindling, the future years.”
lb, there was a lot of stress on the company looked bleak. Instead, it found a way to keep going, via
to continue,” Lougher recalled. “There was pressure from shareholders the drill bit.
Western Areas had graduated to produc- to park up operations and wait it out, but “We came out in 2007 with the discovery
er ranks in 2006 when it began mining the mining is not really like that, you have to of Spotted Quoll and had that up and run-
keep things going,” Lougher said. “Despite ning by 2009,” Lougher explained. “That is
the quickest discovery hit to production of
any operation in WA, although IGO claims it
was close with Nova.”
Those achievements were completed
amidst a backdrop of not only price volatility
but seismic changes in the nickel world. The
original price rise was sparked by China’s
industrialisation and demand for stainless
steel but in the unprecedented run was the
first evidence of an uncertain future. With
Chinese stainless steel producers stung by
nickel’s surge beyond $US63,000/t, they
began looking for alternatives to the tradi-
tional Class 1 refined nickel supply coming
out of WA.
“When the price peaked at $US63,000/t
there was no nickel pig iron at the time,”
Lougher said. “Julian [Hanna, Western Ar-
eas’ founding managing director] and I went
to Hunan province in 2006/07 and saw the
first nickel pig iron facilities taking in Filipino
laterite ore. We looked at that and realised
the technology was coming.”
Western Areas CFO Joe Belladonna with Paul Carter (Morgans), Victor Rajasooriar (Panoramic
Resources), Lougher and Cameron Williams (Morgans) at the Australian Nickel Conference
Page 44 JULY 2022 aUSTRaLIa’S PaYDIRT