Kidman locked in Telsa for its lithium, now nabs Korean behemoth
Lithium mover Kidman Resources locked in Tesla in May and now it’s signed Korea’s largest chemical company, LG Chem.
Kidman (ASX:KDR) was the first Australian lithium miner to strike a supply deal with the American electric car giant and today said it’s inked a non-binding MoU to supply lithium hydroxide to LG Chem.
In 1999, LG Chem became the first company to mass produce lithium-ion batteries in Korea, and now produces a range of automotive batteries, energy storage systems and mobile batteries.
“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,” Kidman boss Martin Donohue said.
Once formalised, this latest deal will see Kidman supply 12,000 tonnes of lithium hydroxide each year to LG Chem for at least 10 years.
The supply will come from the Mount Holland lithium deposit in Western Australia, which is a joint venture between Kidman and the world’s biggest lithium producer Chile’s Sociedad Quimica y Minera (SQM).
Kidman said the pricing is on arm’s length terms set by reference to prevailing market prices, on a basis that will support the company’s proposed debt funding.
In October, the company revealed it had locked in a $US100m loan from partner SQM to partially fund construction at the Mt Holland project.
Kidman’s goal is to secure off-take agreements for about 75 per cent of its share of lithium hydroxide production from the project.
This MoU with LG Chem, the earlier deal with Tesla and another agreement with Mitsui & Co means it now has buyers for its targeted amount of lithium production.
Kidman hopes to have the LG Chem deal cemented by the end of July next year.