LG Chem Puts Dibs On Australian Lithium Hydroxide

Kidman Resources and LG Chem - lithium deal

Kidman Resources Limited has inked a non-binding Memorandum Of Understanding (MOU) with battery giant LG Chem for the supply of lithium hydroxide from the Mt Holland Lithium Project.

The Mt Holland Lithium Project in Western Australia is a 50:50 joint venture between Kidman and Sociedad Quimica y Minera de Chile S.A. (SQM). The venture involves the Earl Grey Mineral Resource, which is estimated to contain 189 million tonnes of 1.50% Li2O (lithium oxide) or 7.03 million tonnes of Lithium Carbonate Equivalent, and is considered to be one of the world’s most significant hard rock lithium deposits.

Earlier this year, Kidman’s/SQM’s Western Australia Lithium (WAL)1 entered into an option to lease a site from the Western Australian Land Authority (t/as LandCorp) for a proposed lithium refinery at Kwinana, south of Perth, which will produce approximately 40,000 tonnes of battery-grade lithium carbonate or lithium hydroxide annually.

Kidman says the agreement with LG Chem involves the supply of 12,000 tonnes of lithium hydroxide to the company annually over 10 years. The two parties have agreed to work towards executing a binding Strategic Supply Agreement by the end of July next year.

LG Chem is a major producer of lithium-ion batteries, manufacturing solutions for everything from small electronics, to solar batteries and electric vehicle energy storage.

“Today’s announcement is a significant milestone towards Kidman’s objective of securing offtake arrangements over approximately 75% of our share of production in the initial years of the project,” stated Kidman CEO and Managing Director, Martin Donohue. “LG Chem is the world’s number one automotive battery supplier and will continue to be a major supplier to the rapidly growing electric vehicle segment.”

Tesla And Mitsui Deals

In May this year, Kidman Resources Limited announced it has entered into a binding agreement with Tesla to supply lithium hydroxide for an initial term of 3 years. The amount wasn’t specified, but it equates to less than 25% of Kidman’s portion (~22,600 tonnes per annum) of initial nameplate production from the refinery for the first three years.

Last month,  Kidman said it had entered into a binding heads of agreement2 with Mitsui & Co., Ltd., one of the largest general trading companies in Japan, for lithium hydroxide supply from the project. The initial term is for two years, plus 2 further two-year extension options. Volumes to be supplied will increase over the course of the agreement and equate to less than 15% Kidman’s share of lithium hydroxide production.

Footnotes

  1. Western Australia Lithium was renamed to Covalent Lithium in August this year. Covalent is the managing entity of the Kidman/SQM JV.
  2. A “heads of agreement” is effectively an agreement about an agreement
About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.

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