Sociedad Química y Minera de Chile has signed a $110m joint venture (JV) agreement to acquire a 50% interest in Kidman Resources’ Mt Holland lithium project in Western Australia (WA).
Following completion of the deal, Mt Holland project will be shared by the companies, having previously been wholly owned by Kidman Resources.
Under the agreement, SQM will make an initial cash payment of $30m to Kidman and contribute $80m to fund the development costs of the project in exchange for the 50% stake.
Furthermore, the companies have agreed to develop a proposed downstream lithium refinery operation to produce lithium carbonate / hydroxide in WA.
The refinery is expected to be underpinned by the Earl Grey lithium deposit at Mt Holland. It contains a mineral resource of 128 million tonnes at 1.44% Li2O for 1.84 million tonnes of lithium oxide.
Funding from SQM will be used for the completion of feasibility studies relating to Mt Holland lithium project, alongside the mine development phase and processing plant on-site.
Funds will also be directed towards the mine's construction phase, processing plant and associated infrastructure, as well as funding the refinery plant's design and study phase.
The agreement will give exclusive rights to the JV to explore and mine for lithium in the project area, while Kidman will retain the exclusive right to exploit gold.
Image: Officials representing Kidman and SQM during a site visit to the Mt Holland project. Photo: courtesy of Kidman Resources Limited.