Piedmont Lithium Ltd. has entered into a binding agreement with Tesla Inc. for the supply of spodumene concentrate (SC6) from its North Carolina operations. The agreement is for an initial five-year term on a fixed-price binding purchase commitment from the delivery of the first product, and may be extended for a second five-year term.

Piedmont controls approximately 28 million metric tons (mt) grading 1.11% lithium oxide (Li2O) located in the Carolina tin-spodumene belt that hosted the Hallman Beam and Kings Mountain mines.

The Piedmont’s commitment to Tesla represents approximately one-third of Piedmont’s planned SC6 production of 160,000 mt per year (mt/y) for the initial five-year term. Sales are expected to generate between 10%-20% of Piedmont’s total revenues from its proposed integrated mine-to-hydroxide project for the five-year term.

The agreement is conditional upon Tesla and Piedmont have agreed to a tentative start date for spodumene concentrate deliveries between July 2022 and July 2023 based on the development schedules of both parties.

“We are excited to be working with Tesla, which represents the start of the first U.S. domestic lithium supply chain and a disruption to the current value chain,” Piedmont President and CEO Keith D. Phillips 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.”

Phillips said Piedmont will now accelerate its mine/concentrator development to support Tesla’s plans, work to further expanding its mineral resources, and potentially increase its planned annual spodumene concentrate production capacity.

“We will simultaneously advance 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,” Phillips said.