Pure Energy Minerals has struck an agreement with Tesla Motors for the potential supply of lithium hydroxide that it plans to produce from the Clayton Valley, Nevada, lithium brine project. Pure Energy will conduct a mining study in the form of a preliminary economic assessment, prefeasibility study, or feasibility study to confirm the technical feasibility and economic viability of the project.
Provided that Pure Energy meets certain terms and conditions related to project execution, product quality and timing of delivery, the agreement establishes a commitment for an annual purchase volume of product over a period of five years by Tesla and/or its authorized purchasers. The deal also sets a predetermined price that is below current market rates and is aligned with Tesla’s goal to continuously reduce the cost of its lithium ion batteries. It is proposed that the lithium hydroxide will be used in the battery cell manufacturing process of Tesla’s rapidly growing electric vehicle and stationary storage business units, which are located approximately 3.5 hours from the project. Any deliveries from Pure Energy will cover a portion of Tesla’s needs with the remainder to come from other sources.
“This agreement with Tesla is a significant milestone that validates Pure Energy’s lithium brine project and business development model, and is an important step in the development of the project,” said Robert Mintak, CEO, Pure Energy. “Pure Energy is aligned with both Tesla’s and the state of Nevada’s development objectives, and we hope to positively contribute to Nevada’s booming clean energy-based economy.”