Kidman and SQM Choose Site for New Lithium Plant in Australia

Australian lithium miner Kidman Resources (ASX:KDR) and its joint venture partner Chile’s SQM (NYSE:SQM) are set to open a new lithium processing plant in Western Australia.

Kidman has selected a site in the Kwinana Strategic Industrial area, south of Perth, the company said in a press release on Friday (May 4).

“Putting our foot on the Kwinana site is a major step in Kidman delivering its strategy of being an ASX-listed integrated manufacturer of battery-grade refined lithium,” said Martin Donohue, CEO and managing director of Kidman.

The announcement follows the company’s recent comments regarding the high level of interest it has experienced from various parties seeking refined lithium offtake, he added.

The joint venture, Western Australia Lithium, is advancing a definitive feasibility study for the refinery, which is expected to be completed in late 2018. The plant will convert lithium ore from the Mt Holland project.

Western Australia Lithium plans to commission the refinery in 2021, with an initial annual nameplate capacity of around 44,000 tonnes of lithium hydroxide or 37,000 tonnes of lithium carbonate.

The Western Australian state government welcomed the Kidman-SQM plan and said it had set aside AU$5.5 million to help fund battery technology development in the state. The construction of the processing plant is expected to create 400 jobs.

“Our reserves of lithium, nickel, cobalt and other metals required for new technologies, combined with our technical skills and our close proximity to Asia, means WA is well-placed to capitalize on the growing battery market,” Mines and Petroleum Minister Bill Johnston said.

Top lithium producer Tianqi (SZSE:002466) is also building a lithium processing plant in Kwinana, which will have the capacity to produce 24,000 tonnes per year lithium hydroxide.

Western Australia has also attracted interest from US-based Albemarle (NYSE:ALB), which might build a processing plant in Kemerton.

On Monday (May 7), shares of Kidman Resources closed up 2.44 percent in Sydney at AU$2.10. Meanwhile, SQM’s share price closed down 1.63 percent in New York at US$53.24.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.