Tesla is expanding its supply of lithium, a key raw material for the company, through an amended agreement with Piedmont Lithium. The deal will see 125,000 metric tons of lithium delivered to Tesla from 2023 to 2025, with the option to extend the agreement for an additional three years. The lithium will come from Quebec.
In addition to partnering with large mining companies for lithium, Tesla is also working with smaller mining companies like Piedmont. The contract allows these emerging companies to secure funding for new mining projects.
This is not the first time that Tesla has worked with Piedmont; the two companies originally entered a contract in 2020 when Piedmont began developing a mining site in North Carolina. Under the original agreement, Tesla was set to purchase one-third of Piedmont’s projected annual output of 160,000 tons of lithium for at least five years.
Piedmont chief executive officer Keith Phillips said the company was pleased to be partnering with Tesla to supply lithium produced in North America.
“This agreement will ensure critical resources from Québec remain in North America to help support the Inflation Reduction Act [which seeks to] promote the US supply chain, a clean energy economy and global decarbonisation,” he said.
Piedmont Lithium, in partnership with Sayona Mining, owns the NAL mine and concentrator in Quebec. Sayona holds a 75% equity stake in the project through subsidiary Sayona Quebec, while Piedmont owns the remaining 25%, as well as a 15% stake in Sayona.
The partners received final permit approvals to restart the operation last month, and expect to begin producing spodumene concentrate at NAL before the middle of this year, with the first commercial shipments scheduled for the third quarter. The initial output is expected to be around 220,000 tons per year of 6% spodumene concentrate, or 30,000 tons per year of lithium carbonate equivalent.
Piedmont has an offtake agreement with Sayona Quebec that allows it to purchase a minimum of 113,000 tons per year or 50% of the production, which will be subject to floor and ceiling prices for the duration of the mine’s lifespan. Piedmont considers the commercial shipments from NAL to be a key milestone for revenue generation.
