Published On: Tue, May 28th, 2019

Wesfarmers to acquire Australian lithium developer Kidman Resources

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Wesfarmers acquisition of Kidman Resources : Australian conglomerate Wesfarmers and Kidman Resources have entered into a Scheme Implementation Deed (SID) under which the former’s subsidiary Wesfarmers Lithium will acquire 100% of the Melbourne-based lithium developer for around AUD 776 million ( $537 million).

Earlier this month, Wesfarmers proposed to pay AUD 1.90 per share in cash to Kidman Resources, which has been accepted by the latter.

Kidman Resources owns a 50% stake in the Mt Holland lithium project (also called the Earl Grey lithium project) located in Western Australia. The Mt Holland lithium project is being operated by a joint venture, known as Covalent Lithium, of the company with Chilean lithium producer Sociedad Química y Minera de Chile (SQM).

Wesfarmers acquisition of Kidman Resources

Australian lithium developer Kidman Resources to be acquired by Wesfarmers. Photo courtesy of Dnn87/Wikipedia.org.

The Mt Holland lithium project is touted to be the largest undeveloped hard-rock lithium projects in Australia, and will see the development of an open-pit lithium mine along with the installation of a processing plant at Mt Holland and also a 45,000 tonne-a-year lithium hydroxide plant at Kwinana in Perth.

The Mt Holland lithium project is scheduled to produce the first lithium hydroxide in the second half of 2022. Wesfarmers expects to invest AUD 700 million ($484.72 million) on its part for the development of the Australia lithium hydroxide project.

Commenting on Wesfarmers acquisition of Kidman Resources, Rob Scott – Managing Director of Wesfarmers, said: “This is an important milestone in advancing a transaction that provides Wesfarmers with an attractive investment and delivers Kidman shareholders with a compelling premium and certain cash return.”

The SID between Wesfarmers and Kidman Resources will be based on satisfying customary conditions such as shareholder approval of the lithium developer and court approval.

Martin Donohue – CEO of Kidman Resources, commenting on Wesfarmers acquisition of Kidman Resources, said: “We are extremely proud of the hard work and achievements of all our staff and the significant progress we have made to date in developing the Mt Holland Lithium Project. This transaction rewards shareholders for this progress while delivering them with certain cash value for their investment in Kidman today.”

For more updates on Wesfarmers acquisition of Kidman Resources, keep following Business News Today.

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