Kidman extends Li hydroxide offtake talks

Australian lithium developer Kidman Resources is in discussions with "globally significant parties" seeking offtake from its proposed lithium hydroxide joint venture near Perth in Western Australia (WA).

"Expressions of interest from these parties has materially exceeded Kidman's portion of the initial refinery nameplate production capacity," chief executive Martin Donahue said.

Kidman will have access to 22,600 t/yr of output from the plant it is planning to build with Chile-based lithium producer Chile's SQM. It has already entered into binding offtake agreements with US electric vehicle producer Tesla for up to 25pc of its share of output and Japanese trading company Mitsui for up to 15pc of its share of output. It is aiming to commit 75-80pc of its share of the refinery's output to offtake agreement with the remainder staying uncontracted.

Separate studies for the joint venture's mine and concentrator operations and the proposed refinery, which have been completed, will be consolidated into integrated pre-feasibility and definitive feasibility studies for the overall project over the next few months.

The Covalent Lithium joint venture also includes the Earl Grey deposit with a mineral resource of 189mn t grading 1.5pc lithium oxide and containing around 7.03mn t of lithium carbonate equivalent.

Kidman is aiming to become the Australian Securities Exchange's first integrated lithium listing with mine-to-chemicals operations. China's Tianqi Lithium will start producing hydroxide close to Kidman/SQM's proposed plant next year and US-based Albermarle is considering a major hydroxide plant in southwest WA. Both receive their lithium concentrate from the Greenbushes mine that they jointly own through Talison Lithium.

Kidman/SQM's hydroxide plant, with annual capacity of 45,000 t/yr, is subject to the WA state government giving them exemption from an order forcing them to meet mining exploration obligations on certain leases.