Sociedad Química y Minera de Chile SA (SQM), Santiago, said Sept. 11 that it and subsidiary SQM Australia Pty Ltd. have finalized a purchase agreement with MH Gold Pty Ltd., Montague Resources Australia Pty Ltd., and Kidman Resources Ltd. (sellers) to acquire 50 percent of the assets in the lithium mining project called Mount Holland (GM July 14, p. 29), located in the State of Western Australia. Pending compliance with conditions, which include government approval of the transfer of mining rights, SQM Australia has committed to grant Kidman up to US$21.5 million in credit, which will be used by Kidman to continue the development of the Mt. Holland project.
Once the conditions are met, SQM Australia will pay the sellers a price of (a) (i) $5 million, plus (ii) $10 million in capital contributions to the project on behalf of the sellers, and (b) (i) a deferred price amounting to $25 million, plus (ii) $30 million in capital contributions to the project on behalf of the sellers. This price is subject to certain adjustments described in the agreement, including the repayment of credit.
SQM Australia has also committed to make capital contributions of $10 million and $30 million, together with the contributions from the sellers, to finance the development of the project.
In compliance with the conditions, SQM Australia and the sellers will sign, among others, a joint venture agreement for the development, construction, and operation of the mining project, a concentration plant, and a refining plant to produce lithium carbonate and lithium hydroxide, and the agreements allowing the jv to explore and exploit lithium on the mining property of the sellers not included in the agreement.
“We are convinced that the capabilities we have developed in over 20 years producing and commercializing lithium products will be fundamental to successfully develop this project together with our partners,” said Patricio de Solminihac, SQM CEO. “Mount Holland enters our portfolio of lithium projects in Chile and Argentina as a very low-cost project with large reserves. We continue to see strong fundamentals in the growth of this market, and that encourages us to continue looking for new projects where we can add value using our experience and capabilities.”