Kidman Resources secures lithium offtake deal with Tesla

Kidman Resources has signed a binding three-year agreement with clean energy company Tesla for the offtake of lithium hydroxide for use in the company’s electric vehicle (EV) batteries.

The agreement is for an initial term of three years on a fixed-price, take-or-pay basis from first delivery, with the option of two additional three-year terms.

The value of the deal has not been released, but Kidman has entered into some high-profile agreements of late; the company announced on May 4 that its subsidiary joint venture (JV) Western Australia Lithium (WAL) had an exclusive option to lease a site in the Kwinana Industrial Area in Western Australia. The site is expected to start production in mid-2019, creating 400 jobs and producing about 40,000 tonnes a year (t/y) of lithium carbonate.

WAL was borne from a $US110 million ($146.3 million), 50–50 deal between Kidman and Sociedad Quimica y Minera de Chile (SQM) for the development of a refinery at the Mt Holland lithium mine near Southern Cross, WA.

The Tesla agreement will equate to less than 25 per cent of Kidman’s portion of initial nameplate production from the refinery for its first three years of operation.

Tesla’s forthcoming Tesla Y car, the successor to the Tesla S and Tesla X, is expected to be released sometime in 2020.

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