Kidman to supply lithium hydroxide to Tesla

Galtero Lara
May 17, 2018

Kidman Resources can lay claim to being the first Australian lithium miner to strike a supply deal with American electric auto giant Tesla.

The automaker already signed a conditional supply agreement with Pure Energy Minerals, which has claims on 9,500 acres of lithium brine in Clayton Valley - just a four-hour drive from the Tesla Gigafactory, but the mining company has yet to enter a production phase and therefore, Tesla needs to secure other sources.

Kidman is developing the Western Australia Mt Holland Lithium Project via 50/50 joint venture with SQM, the world's largest lithium producer.

An Australian firm has struck a deal with Elon Musk's Tesla electric vehicle company.

VideoA new lithium plant in Kwinana is expected to create thousands of new jobs.

The deal further strengthens the company's case to take part in the refinery joint venture with SQM, subject to it securing funding.

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Kidman is forecasting first lithium concentrate production in the 2nd half of 2019, with the first lithium hydroxide / carbonate production to come in the 2nd half of 2021.

I expect to see more similar offtake agreements from Tesla in the near future.

High demand for lithium has significantly increase since the advent of EVs as it is one of the key metals, along with cobalt and copper, in the development of the batteries needed to power the vehicles.

The Telsa deal covers less than 25 per cent of Kidman's share of initial nameplate production for the first three years from the refinery.

"To date, expressions of interest from these parties have materially exceeded Kidman's portion of initial refinery nameplate production", the company said.

Kidman said: "In addition to the agreement with Tesla, Kidman is in discussions with other strategic, globally significant parties also seeking refined lithium uptake".

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