Kidman deals move Mt Holland plans forward
ASX-listed lithium hopeful Kidman Resources is a step closer to getting the backing it needs to develop the Mt Holland lithium mine in the Goldfields with Chilean lithium giant Sociedad Quimica y Minera de Chile.
Kidman has followed an offtake agreement with Elon Musk’s US electric vehicle company Tesla with a two-year supply deal that would send 15 per cent of its production from a proposed Kwinana lithium refinery to Japanese industrial corporation Mitsui.
The deal will result in a supply agreement once product specifications are complete for its lithium hydroxide, which will be produced with SQM under the new Covalent Lithium brand.
The Martin Donohue-led company wants to contract 75 per cent of its early production from the 45,000-tonne-a-year downstream refinery to support a decision to mine.
A pre-feasibility study last month placed an almost $1 billion price tag on the development, but estimated it would generate up to $US33.5 billion in revenue over a nearly half-century lifespan.
Kidman requires $US300 million to underpin its portion of the build costs for the Mt Holland mine, south of Southern Cross, and the Kwinana lithium hydroxide plant.
SQM came to help with an initial debt facility of $US100 million, with a further $US10m committed for future feasibility studies and early joint venture requirements.
Kidman Resources shares closes nearly 10 per cent higher yesterday at $1.52.
Geologists inspect the Mt Holland core farm.