Kidman Resources has signed a three-year offtake agreement with Tesla for the supply of lithium hydroxide, less than two weeks after announcing Kwinana as the site for a new lithium refinery.
The deal, which equates to less than 25 per cent of Kidman’s portion of initial nameplate production for the refinery, has an initial three-year term on a fixed-price take-or-pay basis, with two three-year term options.
Kidman said the other commercial terms of the agreement are confidential.
“In addition to the agreement with Tesla, Kidman is in discussions with other strategic, globally significant parties also seeking refined lithium offtake,” the company said in a statement to the ASX.
“To date, expressions of interest from these parties have materially exceeded Kidman’s portion of initial refinery nameplate production.
“Kidman is currently targeting to enter into a limited number of offtake agreements, while leaving a minority portion of future supply uncontracted.”
Earlier this month, a joint venture between Kidman and Chilean miner Sociedad Quimica y Minera de Chile (SQM) signed an option agreement with state government agency LandCorp over a vacant lot in Kwinana to build a refinery.
The refinery will have an annual capacity of about 44,000 tonnes of lithium hydroxide or 37,000t of lithium carbonate, with Kidman forecasting commissioning in 2021.
The refinery will process ore from Kidman’s planned Mt Holland mine near Southern Cross.
Shares in Kidman were up 3.2 per cent at $2.23 each at 1pm AEDT.
