IGO (ASX:IGO) is in need of a clear proposition and strategy to optimize the value of the Greenbushes lithium operation, an asset in which the company's Tianqi Lithium Energy Australia joint venture owns a 51% stake, according to a Monday report Jarden Research.

Jarden Research notes that the Greenbushes operation was valued by an independent engineering firm at AU$8.97 billion, lower than the Jarden's estimate of AU$15.37 billion.

The lower value for Greenbushes is driven by increasing operational costs and a higher discount rate applied to future cash flows, which reduces the project's overall present value, Jarden said.

An independent consultant's report also shows that the life of the mine is about 6 years shorter than the one proposed by Talison, the operator of the Greenbushes mine, Jarden added.

While Jarden sees that IGO offers value as a clean lithium producer, needs to optimize its asset base and minimize corporate-level value leakage.

Jarden maintained IGO's buy rating but lowered its price target to AU$5.52 from AU$6.07.

Shares of IGO fell 3% on market close.