Kidman Resources has finalised a $US110 million, 50-50 joint venture agreement with Chile’s SQM (Sociedad Quimica y Minera de Chile) at the Mt Holland lithium operations in Western Australia.
The two companies, which flagged they would form a JV in July, intend to build a mine and concentrator producing 6 per cent lithium concentrate.
They eventually aim to develop a refinery — currently undergoing a feasibility study — for the production of lithium carbonate and lithium hydroxide, dependent on the continued potential of the in-demand ore.
The JV represents a considerable step for Kidman into the lucrative lithium mining industry, drawing on what the company’s managing director Martin Donahue refers to as SQM’s “considerable metallurgical expertise”.
Kidman will retain sole marketing rights to its 50 per cent share of lithium production, as well as all rights to Mt Holland’s gold resources as part of the deal.
The $US110 million JV is broken into two parts. SQM is paying $US30 million for a 50 per cent share of the Mt Holland tenements, while the remaining $US80 million will also be paid by SQM for further project funding.
SQM is one of the world’s major players in the lithium industry, controlling 26 per cent of the global market as of January 2017.
WA has experienced a boom in lithium production over the last year, increasing from just one mine to seven, and also hosts the world’s largest lithium mine, Greenbushes, a joint Sino-American venture.
Lithium has become something of a hot property in the mining industry, with its demand fuelled in part by emerging technological developments.
Australia is the world’s largest lithium-producing country, though the so-called South American ‘Lithium Triangle’ of Chile (the world’s second-biggest producer), Bolivia, and Argentina edge out Australian reserves overall.
Demand for emerging green technologies, such as solar panels, EVs, (the upcoming Tesla Model 3 is expected to be a game-changer for the nascent electric car industry) and flow batteries, as well as high demand from Chinese producers, have all been explained as reasons behind the surge in popularity.