Piedmont Lithium (ASX:PLL) reports it has amended its offtake agreement with American multinational automotive and clean energy company Tesla (NASDAQ:TSLA).
The newly amended 3-year offtake agreement with Tesla will see Piedmont deliver about 125,000 metric tons of spodumene concentrate (SC6) to the automotive company at the beginning of H2 2023 through to the end of 2025.
It is also reported that under the terms of the offtake agreement, the pricing of SC6 will be determined by a formula-based mechanism that is linked to average market prices for lithium hydroxide monohydrate throughout the term of the agreement.
In addition, the pricing received by Piedmont under its agreement with Tesla is set to be determined by market prices at the time of each shipment.
Speaking on the amended agreement, Piedmont Lithium President and Chief Executive Officer (CEO), Keith Phillips, says: “We are pleased to be able to partner with Tesla to supply lithium resources produced in North America. The electric vehicle and critical battery materials landscape has changed ‘significantly’ since 2020 and this agreement reflects the importance of – and growing demand for – a North American lithium supply chain.
“The electric vehicle and critical battery materials landscape has changed ‘significantly’ since 2020 and this agreement reflects the importance of – and growing demand for – a North American lithium supply chain”
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 US supply chain, the clean energy economy and global decarbonisation.”
The company also notes that it plans to achieve the delivery of SC6 through its other offtake agreement with Sayona Quebec (ASX:SYA), in which Piedmont has the right to purchase the greater of 113,000 metric tons per year or 50% of SC6 production.
However, these purchases are subject to floor and ceiling prices for the life-of-mine term.
Piedmont Lithium is an ASX-listed, lithium-focused company focused on enabling the transition to a net zero world and the creation of a clean energy economy in North America. The company’s current goal is to become one of the largest lithium hydroxide producers within the North American continent by processing spodumene concentrate from its assets where it holds economic interest.
Assets currently held within Piedmont’s arsenal include the Carolina and Tennessee Lithium Projects within the US, as well as partnerships with Sayona Quebec and African-based exploration company Atlantic Lithium (ASX:A11).
With the offtake agreement with Tesla now amended and signed, Piedmont Lithium announces that SC6 production is expected to restart at NAL during the first half of the year, with the first commercial shipments anticipated to commence in Q3 2023.
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