The HoA is for an initial two-year term, allows for two further two-year extensions.
It comes after Kidman and 50% partner SQM released a prefeasibility study for a US$436 million lithium refinery to be built at Kwinana, south of Perth.
Total capex (on a 100% basis) for the Mt Holland mine and 45,254 tonne per annum refinery were $755 million.
Agreed volumes to be supplied by Kidman to Mitsui will gradually increase and equate to less than 15% of Kidman's share of nameplate production from the planned refinery.
Pricing will be based on the price Mitsui achieves from its customers and prevailing international prices, but will be subject to a floor price.
While the agreement is binding, it is subject to the finalisation of product specifications and the lithium hydroxide produced at Mt Holland being qualified for use by Mitsui customers.
The parties have agreed to enter into a definitive supply agreement by the end of June next year.
Kidman and Mitsui have also agreed to progress discussions in relation to a potential spodumene offtake agreement covering any excess spodumene concentrate produced from Mt Holland that is not required for the Refinery.
Kidman managing director Martin Donohue said the company was pleased to announce an agreement with Mitsui.
"This follows the announcement in May 2018 of our offtake agreement with Tesla and is further evidence of the demand for the high-quality lithium hydroxide to be produced from the Mt Holland lithium project," he said.
"Kidman continues to progress its strategy of entering into a limited number of significant offtake agreements to develop long term customer relationships and support its proposed debt financing, while leaving a minority portion of its future supply uncontracted."
Kidman said it was continuing discussions with further potential offtake partners with the aim of securing binding contracts that will cover around 75% of Kidman's share of production in the early years of the project.
SQM and Kidman are aiming to make a final investment decision early next year, subject to resolution of a forfeiture claim and the required permits being obtained.
In September, the WA Warden's Court ruled that subsidiaries held by Kidman were not exempt from minimum expenditure obligations over the 13 tenements that comprise Mt Holland, and contain Earl Grey, one of the world's largest undeveloped lithium deposits with a resource of 189 million tonnes at 1.5% lithium oxide for 7.03Mt of lithium carbonate equivalent.
Collapsed gold explorer Convergent Minerals had failed to meet requirements between 2014 and 2016, before Kidman secured the project.
Kidman has described the claim as "opportunistic and without merit".
WA Mines and Petroleum Minister Bill Johnston is expected to make a final determination on the forfeiture claims any day, and if he fails to grant an exemption, the tenements could be forfeited.
Kidman shares jumped 16.5% to $1.165 today, the highest level since September.
