Piedmont Lithium said Tuesday it has amended its agreement with Tesla to supply spodumene concentrate. The agreement has a three-year term with the possibility of extension.

Piedmont Lithium, the world's leading developer of lithium resources critical to electric vehicle supply, announced on Tuesday that it has changed its agreement with Tesla to supply spodumene concentrate (“SC6”) from North American Lithium (“NAL”). Piedmont and Tesla have mutually agreed to amend their previous supply agreement with the terms of this new agreement, which are binding for a three-year period and include the possibility of an extension for another three years. Under the amended agreement, Piedmont has agreed to supply about 125,000 metric tons of SC6 to Tesla starting in the second half of 2023 through the end of 2025.

According to the terms, the SC6 pricing will be determined by a formula-based mechanism linked to average market prices for lithium hydroxide monohydrate throughout the term of the agreement. The pricing received by Piedmont under the agreement with Tesla will be determined by market prices at the time of each shipment.

“We are pleased to be able to partner with Tesla to supply lithium resources produced in North America,” said Piedmont Lithium President and CEO Keith Phillips. “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 U.S. supply chain, the clean energy economy, and global decarbonization.”

Spodumene concentrate production is expected to resume at NAL in the first half of 2023, with the first commercial shipments starting in the third quarter of 2023. Piedmont plans to deliver SC6 to Tesla from NAL under Piedmont’s offtake agreement with Sayona Quebec, which entitles Piedmont to purchase the greater of 113,000 metric tons per year or 50% of SC6 production. Piedmont’s purchases of SC6 from Sayona Quebec are subject to floor and ceiling prices for the life-of-mine term. The SC6 will be recycled at Tesla's new Corpus Christi factory in Texas to produce batteries for its electric vehicles.

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