Kidman Resources Ltd. said Dec. 19 that it secured a nonbinding off-take deal with LG Chem Ltd. to supply 12,000 tonnes per annum of lithium hydroxide produced from the Mount Holland lithium project in Western Australia, a 50/50 joint venture with Sociedad Quimica y Minera de Chile SA, for 10 years.
The nonbinding deal contemplates a binding supply deal with the automotive battery supplier by July 31, 2019. Commercial terms were not disclosed.
Kidman has secured deals totaling 75% of its 22,600-tonne-per-annum share in the Mount Holland joint venture's output. It agreed to supply lithium to both Mitsui & Co. Ltd. and Tesla Inc. for an initial two- and three-year period, respectively.
An integrated pre-feasibility study for the Mount Holland joint venture outlined a posttax net present value, discounted at 10%, of US$2.2 billion, a 26.6% internal rate of return and a three-year payback period.
Kidman reached a settlement with private company Phoenix Rise and a retired geologist earlier this month over a case that could have delayed the development of the Mount Holland joint venture.