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Australia's Kidman enters lithium agreement with Tesla

17 May 2018 12:00 (+01:00 GMT)
Australia's Kidman enters lithium agreement with Tesla

Johannesburg, 17 May (Argus) — Australian lithium developer Kidman Resources has entered into a binding lithium hydroxide offtake agreement with US-based electric vehicle and energy storage firm Tesla.

The agreement is for an initial period of three years on a fixed-price basis and contains two three-year term options.

Kidman and its joint-venture partner, Chilean lithium producer SQM, earlier this month entered into an exclusive option to lease a site at the Kwinana Strategic Industrial Area near Perth for the establishment of a lithium hydroxide refinery.

Kidman's agreement with Tesla equates to less than 25pc of the company's portion of the initial nameplate production of the first three years of the refinery. Kidman is also in discussions with other strategic partners seeking to secure lithium offtake.

"Expressions of interest from these parties have materially exceeded Kidman's portion of initial nameplate refinery production. Kidman is currently targeting to enter into a limited number of offtake agreements, while leaving a minority portion of future supply uncontracted," the company said.

Kidman and SQM are jointly developing the Mt Holland project in Western Australia, which contains the Earl Grey deposit — one of the world's largest hard rock lithium resources.

Tesla is the latest electric vehicle manufacturer to directly secure lithium offtake from a lithium producer. China's Great Wall Motor Company has an agreement with Pilbara Minerals for lithium concentrate from the second stage of its Pilgangoora project in Western Australia.