Battery Metals

Lithium Investing

The companies have finalized and executed definitive agreements to develop the Mt Holland lithium operation in Western Australia.

Australia-listed Kidman Resources (ASX:KDR) and Chile’s Sociedad Quimica y Minera (NYSE:SQM) have finalized and executed definitive agreements to develop the Mt Holland lithium operation.
As part of the joint venture, SQM will spend $110 million on a 50-percent stake in Mt Holland, the companies announced on Tuesday (September 12). Mt Holland will include a spodumene mine and lithium concentrator, and the integrated project will be centered on the Earl Grey hard-rock lithium deposit, located south of Southern Cross in Western Australia.
“The outlook for the lithium market has never been stronger, and we view Mt Holland as the best undeveloped hard-rock lithium project in Australia,” SQM Chief Executive Patricio de Solminihac said.

“SQM has searched the globe for world-class lithium projects to complement our existing production in Chile and emerging project in Argentina, and we are delighted to be partnering with Kidman to develop the integrated Mt Holland project,” he added.
Top lithium producer SQM has brine assets in Chile, where it produces industrial and battery-grade lithium. The company is also developing the Cauchari-Olaroz lithium project in Argentina in partnership with Lithium Americas (TSX:LAC).
As mentioned, Kidman and SQM plan to build a mine and concentrator at Mt Holland. It will produce 6 percent lithium concentrate, and when the joint venture was first announced in July, SQM said the initial production target for will be 40,000 tonnes per year of lithium carbonate equivalent in 2021.
Initial steps will include the development of a refinery to produce lithium carbonate, lithium hydroxide or a combination of the two, depending on end-user demand. The companies have already jointly commenced work on a feasibility study for the refinery, which will also be located in Western Australia.
“Kidman is excited about the lithium refinery potential and intends to take up its rights for a 50% share of the development,” said Kidman Managing Director Martin Donohue.
Australia is the world’s top lithium-producing country, with total mine output of 14,300 MT in 2016. Over the last year, Western Australia has seen its lithium production surge significantly, with the number of mines in the area rising from one to seven. The region also hosts the world’s longest continuously operating lithium mine, Greenbushes, operated by Talison Lithium.
Demand for lithium is forecast to increase in the next few years as electric cars sales continue to surge. Lithium is a key component of the batteries used to power electric vehicles, and demand is expected to reach above 400 GWh by 2025, according to Benchmark Mineral Intelligence. Most analysts expect global lithium output to reach 400,000 to 500,000 tonnes by the same year.
On Tuesday, SQM’s share price closed in New York at $52.20, up 82.2 percent since January. Meanwhile, Kidman closed 7.14 percent up in Sydney at AU$0.83. The company’s share price has jumped more than 40 percent since the beginning of the year.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.


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