Tesla’s discussions with the Australian lithium mining company Core Lithium Ltd have ceased after skyrocketing prices have increasingly become a theme during the talks (via Bloomberg).
In March, Core Lithium announced a deal with Tesla for 110,000 tonnes of lithium spodumene concentrate. The mining company’s contract was set to provide lithium to Tesla starting in the second half of 2023 and last for four years.
On Wednesday, the deal’s deadline passed without the two companies finalizing any agreements, according to a statement from Core.
Tesla Signs Lithium Supply Deal with Australia’s Liontown Resources https://t.co/dBi4Ch2ZLz
— TeslaNorth.com (@RealTeslaNorth) February 16, 2022
The news comes as Tesla faces increasing competition in the electric vehicle (EV) industry at large, causing continued increases in demand — all against the backdrop of growing concerns of an economic downturn.
The tighter EV market leaves miners in a better position to supply the mineral at a high price point.
High raw materials prices along with “an increasing lithium price environment indicate that Core Lithium is well positioned to capitalize on the high demand and current shortage of available battery grade lithium spodumene concentrate,” according to Core Lithium CEO Gareth Manderson.
Core Lithium extended its discussions with Tesla over the 110,000-tonne supply deal in August, but it currently has set deals with roughly 80 percent of production on an upcoming Finniss mine operation.
In April, Tesla CEO Elon Musk said the price of lithium rose to “insane levels,” adding that the automaker was considering mining and refining the mineral if increasing costs didn’t come back down.
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