Lithium developer Kidman, through a joint venture (JV) with Sociedad Quimica y Minera de Chile (SQM), owns a 50% interest in the Mt Holland Lithium Deposit in Western Australia.
The project will involve the construction of a mine and co-located concentrator at Mt Holland, and a lithium hydroxide refinery in Kwinana.
Construction of the project is subject to regulatory approvals and detailed engineering studies, and is expected to commence in FY2020. The refinery is expected to begin lithium hydroxide production in FY2022.
Under the process and exclusivity deed entered by Wesfarmers, the board of Kidman has granted the former up to four weeks to undertake exclusive confirmatory due diligence.
The companies will negotiate a scheme implementation agreement (SIA) during this period, reflecting the key commercial terms of the proposal.
Wesfarmers managing director Rob Scott said: “The acquisition of Kidman provides an opportunity to invest in and develop a large-scale, long-life and high-grade lithium hydroxide project in Western Australia.
“In partnership with SQM, we will support the development of an integrated, world-class lithium operation in Western Australia, bringing significant investment, jobs and technical expertise to the state.”
Wesfarmers acquisition proposal is conditional upon the satisfaction of customary conditions including the completion of confirmatory due diligence, entry into an SIA, final board approvals and Kidman shareholders’ approval.
Additionally, the proposal is conditional on Wesfarmers entering into an agreement with SQM to effect amendments to the Mt Holland lithium project JV agreement.
Wesfarmers will fund the transaction through its existing balance sheet capacity and debt facilities.