Piedmont Lithium has inked an agreement to supply spodumene concentrate to Tesla for five years.
The announcement follows a probe into Piedmont by the Australian Securities Exchange (ASX) in September, after the miner experienced a significant spike to its share prices despite no news being released.
Piedmont announced its deal with Tesla on its website on September 23 before the news was released on the ASX, but it was removed soon after.
Under its agreement, Piedmont will supply its spodumene at a fixed price, with the option to extend its sales agreement for a further five years.
Spodumene concentrate deliveries are set to commence between July 2022 and July 2023.
The deal will cover one-third of the miner’s planned spodumene concentrate production of 160,000 tonnes a year for five years.
Additional quantities of spodumene concentrate may be delivered “at Tesla’s option”.
It is expected that the sales will generate 10 to 20 per cent of Piedmont’s total revenue from its mine-to-hydroxide project.
Piedmont president and chief executive said the deal represented the start of the first domestic lithium supply chain in the United States.
“We are excited to be working with Tesla, which represents the start of the first US domestic lithium supply chain and a disruption to the current value chain,” he said.
“The agreement highlights the strategic importance of Piedmont’s unique American spodumene deposit and confirms the trend toward spodumene as the preferred feedstock for the lithium hydroxide required in high-nickel batteries.”
To support Tesla’s plans, Piedmont will accelerate its mine and concentrator development to increase its mineral resources.
The spodumene will be supplied by the company through the company’s Piedmont Lithium project, which is located in the Carolina tin-spodumene belt in North Carolina, United States and will aim to convert 22,700 tonnes of spodumene per year to battery-grade lithium hydroxide.
The Piedmont Lithium project is one of four projects of its kind globally.