Australia's Piedmont signs lithium ore
supply deal with Tesla, shares surge
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[September 28, 2020]
(Reuters) - Piedmont Lithium <PLL.AX> on
Monday said it signed a five-year deal with Tesla Inc <TSLA.O> to supply
high-purity lithium ore mineral to the U.S. electric carmaker, prompting
an 83% surge in the Australian lithium miner's shares. |
Tesla Motors' cars are displayed at the company's new showroom in
Manhattan's Meatpacking District in New York City, U.S., December 14,
2017. REUTERS/Brendan McDermid |
The
initial five-year agreement implies that Piedmont will supply
about a third of its planned 160,000-tonnes-per-year spodumene
concentrate produce from its deposits in North Carolina. Both
companies have an option to extend the deal for another five
years.
Shares of the Australian miner touched their highest since May
2007.
The deal comes on the heels of Tesla's "Battery Day"
presentation last week when Chief Executive Elon Musk shared his
vision of novel, proprietary Tesla batteries, following which
Tesla stock lost more than $30 billion in market value.
Piedmont said in a statement that the agreement marked the
beginning of the its first U.S. domestic lithium supply chain
and that talks are ongoing over other sales arrangements.
Tesla did not respond to a Reuters request for comment outside
regular business hours.
The deal is conditional upon both companies agreeing to start
deliveries between July 2022 and July 2023, the Australian firm
said.
(Reporting by Sameer Manekar and Shashwat Awasthi in Bengaluru;
Editing by Kim Coghill and Sherry Jacob-Phillips)
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