Australia

WA lithium miner heralds commitment to Australia after legal hurdle

In a statement on Monday Kidman said it acquired the Mt Holland project on July 7, 2016 and if the warden's recommendations were accepted by Mr Johnston it would cause delays to the Mt Holland project and the lithium hydroxide refinery earmarked for Kwinana.

Thew statement also said there were compelling reasons for the minister to reject the warden's recommendations and approve the exemptions.

It said the estimated expenditure shortfall of $100,000 was far less than the economic impact Kidman and SQM's planned lithium operations would have on the WA and Australian economy.

"Clearly, the Mt Holland Project is of strategic significance to Western Australia and the stated
objective of the Western Australian Government to establish a global lithium province in the
state," the statement read.

"The Mt Holland project has already been granted lead agency status as a project of
state significance.

"Kidman and SQM have so far invested more than $55 million in the Mt Holland Project, which is expected to directly create more than 350 jobs by 2021, plus additional jobs through the construction phase.

"The project will make a significant contribution to the Western Australian economy through taxes and State royalties."

Kidman managing director and chief executive Martin Donohue said the companies had made sound progress on the feasibility studies, secured the Kwinana refinery site, entered their first deal with Tesla and were in advanced talks with other parties for the remaining lithium produced at Mt Holland.

He said they disagreed with the warden’s decision on several grounds.

"We strongly believe that the Mt Holland Project, including the downstream refinery at Kwinana, is a project of not just importance to the state of Western Australia but also nationally as the supply chain for the emerging lithium industry is being established now and the opportunity for all relevant stakeholders that the Mt Holland Project provides is current,"he said.

"Kidman will continue to update shareholders on this matter and will continue progressing the project with the support of its joint venture partner.”

If Mr Johnston followed the warden’s recommendation not to grant the exemptions, the forfeiture applications would be heard before the warden. Kidman said if that happened it would "vigorously defend" them.

A spokeswoman for Mr Johnston said the minister would comment on the matter until he had made a decision.
“It is a lengthy process, which requires careful consideration," she said.

“All parties involved will be given the opportunity to make a submission to the minister on the warden’s recommendation, in accordance with the required process.

“Once the process is complete he will make a decision.”

Kidman shares plunged from $1.26 to $1 on Monday morning after returning from their trading halt last week. At the time of writing they were trading at $1.06.

In May, global electric car maker Tesla signed a three-year supply contract with Kidman.

Mt Holland was expected to begin producing lithium in 2021 with a targeted annual capacity of 44,000 metric tons.

Less than a quarter of the mine's production will go to Tesla.

Kidman and SQM will soon release the pre-feasibility study for the Kwinana refinery.

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