Kidman Resources has entered a joint venture agreement with Chilean lithium producer Socieded Quimica y Minera de Chile SA (SQM) to develop and operate its Mt Holland lithium project in Western Australia.
Under the 50:50 joint venture agreement, SQM will pay Kidman $US110 million ($146.67 million) to fund the development costs for the project.
Kidman also has the option to acquire a 50 per cent interest in a proposed refinery that will produce lithium carbonate or hydroxide from resources at the site’s Earl Grey lithium deposit.
The JV will hold exclusive rights to explore and mine for lithium in the project area and will be responsible for the development, construction and operation of a spodumene mine, concentration plant and the proposed refinery.
Kidman will retain all gold rights at the Mt Holland project.
Kidman managing director Martin Donohue said it entered the deal with SQM due to the company’s expertise in the lithium business.
“Their proposal to build an integrated lithium business here in Western Australia with a refinery plant drawing on SQM’s technical capabilities has a lot of merit, for both shareholders and for the economic development of WA,” he said.
SQM also completed a period of due diligence on its proposed investment in Mt Holland and long-term partnership with Kidman, with its global leadership group – including chairman Eugeio Ponce, chief executive Patricio de Solminihac and vice president development and planning, Pablo Altimiras – conducting a site visit last week.
“We are very enthusiastic about both the project and investing in Western Australia,” de Solminihac said.
“There are plenty of examples of Australian mining companies investing in Chile, now a Chilean company is making a significant investment in the Australian industry.”