Piedmont Lithium (ASX: PLL) has signed a binding sales agreement to supply electric vehicle and energy storage specialist Tesla with its proposed spodumene concentrate product from its North Carolina project.
The deal is initially for five years on a fixed-price basis and can be extended a further five years by mutual agreement.
Piedmont President and CEO Keith Philips said the agreement covers a fixed commitment for approximately one-third of the company’s planned 160,000 tonne per annum spodumene production.
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,” Mr Philips 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.
“Piedmont will now accelerate our mine and concentrator development to support Tesla’s plans, work to further expand our mineral resources and potentially increase our planned annual spodumene contrate production capacity.
“We will simultaneously be advancing our plans to produce lithium hydroxide in North Carolina using a combination of internally produced spodumene concentrate as well as material sourced from other producers around the world.”
The agreement is conditional upon Tesla and Piedmont agreeing to a start date for spodumene concentrate deliveries between July 2022 and July 2023 based on the development schedules of both parties.
The Piedmont Lithium Project is located within the world-class Carolina Tin-Spodumene Belt (TSB) and along trend to the Hallman Beam and Kings Mountain mines, historically providing most of the western world’s lithium from the 1950s through the 1980s.
The TSB has been described as one of the largest lithium regions in the world and is located approximately 25 miles west of Charlotte, North Carolina.