Kidman Resources offloads half stake in WA lithium project for $US70m
Kidman Resources has sold a half stake in its Mt Holland lithium project in Western Australia to Chile’s Socieded Quimica y Minera (SQM) in a $US70 million deal that includes project development funding.
The binding deal, which is conditional on FIRB approval, will help fund development of Mt Holland’s Earl Grey lithium deposit and comes with an additional $US21.5m loan to Kidman until it is finalised.
It comprises an $US30m upfront cash payment to Melbourne-based Kidman (
KDR) and $US80m in staged payments to cover initial project funding costs.
With Mt Holland project becoming a 50-50 joint venture, the $US80m represents a $US40m payment to Kidman.
The funding will be directed to finishing feasibility studies, developing the mine and plant and studying a refinery.
“The project characteristics, coupled with out expertise in lithium production and the lithium market will make this project a great addition to our production portfolio,” SQM chief executive Patricio De Solminihac said.
He said it was good to see a Chilean company investing in Australia after many Australian mining companies had invested in Chile.
Kidman managing director Martin Donahoe said Earl Grey had attracted significant interest globally.
“The decision to sign the binding letter agreement with SQM was justified by its unmatched expertise in the lithium business,” he said.
“They are the world’s largest producer, with a depth of technical and marketing expertise that will benefit the joint venture.”
The pair are aiming to produce 40,000 tonnes a year of lithium carbonate equivalent at Mt Holland from 2021.
The deal is conditional on FIRB approval and other third-party approvals.
