Piedmont Lithium Inc., an Australian lithium mining company headquartered in North Carolina, has amended its deal with Tesla to supply the electric vehicle (EV) maker with spodumene concentrate (SC6) — reports MarketWatch.
Spodumene is a mineral that contains lithium, an integral component of the lithium-ion batteries used in EVs. In 2020, Piedmont struck a deal to supply one-third of its SC6 production to Tesla over a five-year contract period, with an optional extension of another five years.
Now, the two companies have modified their agreement for a three-year term instead. Under the new deal, Piedmont has agreed to deliver about 125,000 metric tons of SC6 to Tesla through the end of 2025. The first deliveries are slated to begin in the second half of 2023.
Piedmont and Tesla will have the option to renew their contract for an additional three years. Pricing for the SC6 will be determined by a formula-based mechanism linked to average market prices for lithium hydroxide monohydrate throughout the deal’s term.
Piedmont said it plans to supply Tesla with SC6 from the North American Lithium Project in Quebec, Canada. Pricing for each shipment will be determined by market prices at the time of delivery, the company noted.
“This agreement helps to ensure that these critical resources from Quebec remain in North America and support the mission of the Inflation Reduction Act to bolster the U.S. supply chain, the clean energy economy, and global decarbonization,” said Piedmont CEO Keith Phillips.
Eligibility for $3,750 USD of the $7,500 in tax credits offered by the Inflation Reduction Act for passenger EV purchases is dependent on at least 40% of the battery minerals that went into the vehicle’s battery pack being sourced from the U.S. or a country with a free trade agreement with the U.S.
