IGO Ltd (ASX:IGO) has told investors all work and activities on Lithium Hydroxide Plant 2 (LHP2) at Kwinana – which the company holds through its 49% investment in Tianqi Lithium Energy Australia (TLEA) – will be shut down.

The decision was made in agreement with Chinese partner Tianqi Lithium Corporation (TLC) and comes amid IGO’s anticipation that problems at the refinery will produce a net loss in the first half of the year.

Results where that would pop up are to be published on Thursday, February 20.

Chiefly, the plant’s struggles have revolved around production delays and a drop in the lithium price – and IGO is currently carrying out an impairment testing process to get to the bottom of the former.

However, it is known that a buildup of lithium at LHP2 is part of the problem, as IGO faces less interest in its lithium hydroxide product from potential customers, who have previously used this for electric vehicle batteries and energy storage.

IGO shares have been trading at $5.21.

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