Tesla is trying to mine its own Lithium after dropping M&A plan

Marco Green
September 30, 2020

Piedmont Lithium (PLL +312.2%) shares more than quadruple following news it signed a sales agreement with Tesla to supply lithium raw material spodumene concentrate.

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.

Tesla will be buying the spodumene concentrate at a fixed price so as to remove the volatility from a commodity that has steadily fallen in price since mid-2019.

Piedmont Lithium PLL.AX on Monday said it signed a five-year deal with Tesla Inc TSLA.O to supply high-purity lithium ore mineral to the US electric carmaker, prompting an 83% surge in the Australian lithium miner's shares.

The agreement represents about 33% of Piedmont's planned spodumene production of 160,000 tonnes per year, and is expected to generate between 10% to 20% of total revenues for the company.

Piedmont said in a statement that the agreement marked the beginning of the its first USA domestic lithium supply chain and that talks are ongoing over other sales arrangements.

The spodumene concentrate - a high-quality source of lithium - will be sourced from Piedmont's deposit in North Carolina and marks the beginning of the first United States domestic lithium supply chain.

"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 owns 100% interest in a North Carolina mine that is aiming to produce-battery quality lithium hydroxide.

To support Tesla's plans, Piedmont will accelerate its mine and concentrator development to increase its mineral resources.

The Piedmont Lithium project is one of four projects of its kind globally.

Other reports by Click Lancashire

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