Mitsui secures WA lithium hydroxide supplies

Japanese trading house Mitsui has become the latest international company to line up future lithium hydroxide supplies from Western Australia (WA) to meet growing demands from the electric vehicle (EV) and battery storage markets.

It has entered into binding heads of agreement with Australia-based Kidman Resources for lithium hydroxide supplies from its mine-to-refinery joint venture with Chile's SQM.

Mitsui has agreed to a two-year offtake agreement with two extension options. It is expected to buy up to 15pc of Kidman's 22,600 t/yr share of the 45,000 t/yr lithium hydroxide output planned for a refinery at Kwinana, south of Perth.

Kidman and SQM have formed a joint venture Covalent Lithium to manage mining and concentrate operations at the Earl Grey mine, as well as the lithium hydroxide refinery. An investment decision on the integrated development is expected in next year's first half.

Kidman has already signed a three-year binding offtake deal with EV and energy storage firm Tesla for up to 25pc of its share of the refinery lithium hydroxide output.

The deal between Kidman and Mitsui is subject to product specification tests and entering into a definitive supply agreement by 30 June 2019. Either party can terminate the deal if the deadline is not met. The two companies are also discussing a potential offtake agreement for excess lithium concentrate output from the Earl Grey mine that is not required by the refinery.

Kidman is continuing discussions with other potential offtake partners to increase binding offtake agreements to account for 75pc of its attributable lithium oxide production.

Fellow Australia-based lithium producer Pilbara Minerals has an offtake agreement with South Korean steel producer Posco. which includes the potential development of a joint-venture lithium hydroxide plant in South Korea.

Chinese firm Tianqi Lithium is developing a lithium hydroxide plant at Kwinana, while US-based Albermarle is considering a lithium hydroxide plant further down the WA coast.

Australia-based lithium producer Mineral Resources and Neometals are also planning lithium hydroxide plants in WA that may include investment by international partners.