Kidman Resources announces lithium offtake MOU with LG Chem for ~50% of annual production; 12kt/y for 10 years
Australia-based lithium developer Kidman Resources Limited has entered a non-binding Memorandum of Understanding with LG Chem for the supply of lithium hydroxide. The MOU contains commercial terms in relation to the supply of 12kt of lithium hydroxide per year to LG Chem over a term of 10 years.
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. The parties have agreed to work towards execution of a binding Strategic Supply Agreement by 31 July 2019. The other commercial terms of the MOU are confidential.
Kidman’s strategy is to secure offtake agreements with high quality counterparties for approximately 75% of its share of lithium hydroxide production for the initial years of the Mt Holland Lithium Project. The MOU with LG Chem represents approximately 50% of Kidman’s share of lithium hydroxide production of 22.6kt per annum.
Together with the offtake agreement announced with Tesla, Inc. in May 2018, and the binding Heads of Agreement announced with Mitsui & Co. Ltd in November 2018, the company now has arrangements in place that, once finalized, will cover the offtake volumes targeted by its strategy.
Today’s announcement is a significant milestone towards Kidman’s objective of securing offtake arrangements over approximately 75% of our share of production in the initial years of the project. 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. We are pleased to be announcing this MOU and look forward to further developing our relationship with them. Having such a high-quality offtake counterparty provides further support for our ongoing discussions in relation to the provision of debt facilities with prospective lenders.—Kidman’s CEO and Managing Director, Martin Donohue