Tesla has been seeking ethical mining practices for years. Despite the tainted reputations of a number of metal-mining factories caught dumping waste and practicing other environmentally unfriendly habits, one company has managed to land a long-term lithium deal with the electric vehicle (EV) company.
On Tuesday, China’s Sichuan Yahua Industrial Group Co. announced that it had signed a five-year contract to supply Tesla’s lithium hydroxide, according to Automotive News.
The battery-grade lithium hydroxide deal was valued between $630 million (USD) to $880 million (USD) over the years 2021-2025. It’s unclear how much lithium the contract states will be supplied to Tesla, though with costs that high, it’s sure to be a lot.
Tesla reaches five-year lithium deal with Chinese supplier – China's Sichuan Yahua Industrial Group Co. said on Tuesday it had signed a deal to supply battery-grade lithium hydroxide to Tesla Inc. for the next five years.
Yahua, which is based in southwest China's Sichuan prov… pic.twitter.com/HGg9LtTLLd— Paul Richardson (@ValleyTuning) December 29, 2020
Tesla also sources lithium from China’s Ganfeng Lithium, among others, though the company’s supply needs are through the roof right now as the world begins a major transition to EVs.
In May, Yahua began operating a new lithium hydroxide plant which is capable of producing 20,000 tons per year of the compound. This is more than twice the amount of the company’s previous capacity, set to execute on the deal made with Tesla.
As the world continues to embrace EVs, lithium will also continue to become more and more valuable to automakers. Tesla needs all the lithium it can get to keep up with demand right now, and that trend isn’t likely to change anytime soon.
