Kidman Resources has signed a binding heads of agreement with Japan’s Mitsui for the supply of lithium hydroxide from the Mt Holland project near Southern Cross, Western Australia.
The agreement is for an initial two-year term with two two-year extension options. The supply agreement is set to begin by June 30 next year.
Kidman will supply just under 15 per cent of its company nameplate capacity of 22,600 tonnes a year. The agreement is subject to finalisation of Kidman’s product specifications and product qualification by Mitsui’s customers.
Kidman also signed an offtake agreement with electric vehicle (EV) manufacturer Tesla for an initial period of three years in May.
While financial details for both deals have not been released, the Tesla agreement was for less than 25 per cent of Kidman’s nameplate capacity.
The company aims to secure offtake contracts for around 75 per cent of Mt Holland production.
‘Kidman continues to progress its strategy of entering into a limited number of significant offtake agreements to develop long-term customer relationships and support its proposed debt financing, while leaving a minority portion of its future supply uncontracted,” said Kidman chief executive officer and managing director Martin Donohue.
Last month, Kidman revealed a $US601 million ($849 million) capital cost for the Mt Holland project, with average annual production of 45,254t/y of lithium hydroxide in total between Kidman and SQM.
The project is operated under Covalent Lithium, a 50:50 joint venture between Kidman and Sociedad Quimica y Minera de Chile (SQM).