UPDATE 1-Australia’s Kidman Resources to supply lithium hydroxide to Tesla

(Adds background, details on deal)

May 17 (Reuters) – Australian lithium miner Kidman Resources said on Thursday it has entered into a binding agreement to supply lithium hydroxide to electric car maker Tesla Inc.

The deal is for an initial three-year term on a “fixed-price take-or-pay basis” from the first product delivery, and contains two three-year term options, the company said in a statement.

Kidman said it was also in talks with other strategic, globally significant parties seeking offtake of refined lithium, a key ingredient used in batteries for electric vehicles.

The deal comes less than a fortnight after Kidman chose a site in Kwinana, Western Australia, with its joint venture partner Sociedad Quimica y Minera de Chile to develop a lithium processing plant.

Kidman said on Thursday the Tesla deal would represent less than a quarter of its share of initial nameplate production from the refinery for the first three years.

Reporting by Aaron Saldanha in Bengaluru; editing by Richard

JEFFREY LIPTON in BARBADOS – http://feeds.reuters.com/~r/reuters/companyNews/~3/m6ngFzlGD1I/update-1-australias-kidman-resources-to-supply-lithium-hydroxide-to-tesla-idUSL3N1SN6KC