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IGO just misses ‘first strike’ as shareholders vent over takeover disaster and broken lithium refinery

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Sean SmithThe West Australian
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IGO chief executive Ivan Vella speaking at a WA Mining Club lunch in August.
Camera IconIGO chief executive Ivan Vella speaking at a WA Mining Club lunch in August. Credit: Iain Gillespie/The West Australian

IGO has narrowly avoided a first strike at an annual general meeting where small shareholders vented anger over the company’s disastrous Western Areas takeover and its problem-plagued lithium refinery.

Some 24.4 per cent of shares were voted against the company’s executive remuneration report, just under the 25 per cent threshold for a strike, after proxy adviser ISS urged its shareholder clients to protest the company’s reduced returns.

“We acknowledge some shareholders and proxy advisers have had concerns with respect to our remuneration outcomes,” chairman Michael Nossal said.

He said IGO had made “significant changes” to executive pay policies in consultation with investors since last year and “we undertake to continue this engagement and to ensure going forward we strike the appropriate balance between attracting and retaining executive talent and the return outcome for shareholders”.

However, Australian Shareholders’ Association company monitor John Campbell suggested the vote against the remuneration report reflected investor concern about the board’s role in the 2022 takeover of Western Areas.

IGO has blown the $1.3 billion it spent on the deal, closing Western Areas’ projects and wiping off its value after blunders across its financial analysis, due diligence and integration.

While major shareholders have moved on, noting changes within the board and senior management over the past two years, IGO’s vocal retail investors remain angry about the loss of value.

“I’m gobsmacked about how much money has been wasted by this company,” one told the AGM.

The ASA voted against the re-election of Mr Nossal, Keith Spence and Xiaoping Yang, saying they needed to go because of the company’s flawed oversight of the deal. All survived.

Mr Nossal denied the board had evaded a pledge to take responsibility for the takeover, pointing to strengthened internal processes as a result of an external probe commissioned last year into the deal.

“We share your disappointment in the process and the outcome,” he said. “In terms of taking responsibility for it, I think we have done that as a board.”

Mr Nossal said “significant changes have been put through the board’s processes and systems as a result of the review, and all of the recommendations have been adopted”.

However, small shareholders are now worried that they are facing another big hit, this time from the problematic lithium hydroxide plant at Kwinana IGO owns in partnership with its Chinese developer, Tianqi.

The plant has laboured for the past two years to hit a fraction of its capacity, with IGO admitting the unspecified problems could take time to iron out.

“There’s no shortage of focus or effort, but there isn’t a simple solution,” said IGO chief executive Ivan Vella, who joined the company a year ago.

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