Tesla is approaching module battery cell production with a 5 year lithium supply contract

Australian mining company Piedmont Lithium on Monday announced the signing of a five-year supply contract with Tesla. Under the terms of the agreement between the two companies, Piedmont will supply one-third of its 160,000-tonne-a-year spotmeal concentration production annually to the U.S. electric car maker from its North Carolina mines.

A News releaseBeatmond noted that both companies have the option of extending their contract with Tesla for another five years, with its initial agreement set at five years. The Australian mining company added that while its initial contract with Tesla would represent one-third of the annual production of its North Carolina mine at 160,000 tons, more lithium could be supplied to Tesla if needed.

Distributions for Tesla’s lithium may start from July 2022 to July 2023, based on Tesla’s and Piedmont’s development schedules. In a statement, President and CEO Keith Phillips Piedmont lithium, Tesla expressed his excitement over the deal. Phillips also said that Piedmont would accelerate its mining development to support Tesla’s plans.

“We are pleased to work with Tesla to mark the beginning of the U.S. domestic lithium supply chain and the disruption of the current value chain.

“We will now accelerate our mine / concentration growth to support Tesla’s plans, further expand our mineral resources, and increase our planned annual spotfish concentration production capacity. Using a mix of ingredients derived from other manufacturers, ”said Phillips.

The Tesla deal seems to have been hailed by shares of Australian miners. Following its announcement, shares of Piedmont Lithium There was an 83% rise.

Tesla’s battery cell manufacturing initiative has caught the attention of the electric vehicle industry. During the company’s Battery Day event, Tesla outlined its cell production plan, which includes a ground redesign of batteries used for the company’s vehicles and energy-saving products. The result of Tesla’s effort was the Rodrunner cell, which 4680 accepts shape factor, Which allows the size of 2170 cells used in Model 3 and Model Y to be 5 times larger.

But Tesla will have to seal the deal with companies like Piedmont Lithium to achieve its battery production goals, which could provide the electric car maker with the materials needed to produce the battery cells. Previous reports indicate that the company is already engaged in the task of protecting partners for its battery production drive. For example, reports indicate that Tesla, with the exception of Piedmont Lithium In talks with Canadian mining company Giga Metals About the development of the low carbon nickel mine, which will also be built in North America.

Beatmond Lithium news release can be accessed below.

Piedmont Lithium Agreement Issued by Simon Alvarez In the script