02 May Wesfarmers plugs into EV industry with $776 million bid for Kidman Resources
Wesfarmers has made a AUS$776 million offer to buy ASX-listed lithium miner Kidman Resources, as the retail conglomerate looks for a pathway into the rising electric vehicle (EV) sector.
The offer was pitched at a 47% premium to Kidman’s last closing price and has received the backing of Kidman’s board and major shareholders.
Wesfarmers’ latest acquisition attempt comes just over a month after it bid $1.5 billion for rare earths producer Lynas Corp, with both offers indicating the company’s intention to deepen its exposure to high tech minerals.
Lithium is the main component used in batteries powering EVs, while rare earths are used in the manufacture of wind turbines and other high tech products.
Since Rob Scott become managing director in 2017, Wesfarmers has made the biggest overhaul of its portfolio in a decade, quitting coal and spinning out its supermarket group Coles to seek better returns in other high growth sectors.
Scott said the company had been looking at the lithium sector for two years and opted for Kidman after assessing the quality of the Mt Holland project in Western Australia, which Kidman is developing in partnership with Chile’s SQM.
“We expect battery-grade lithium hydroxide to play an important role in the EV supply chain, as car manufacturers shift to production of longer-range battery EVs,” he told a conference call.