Tesla and Core Lithium enter into a binding Term Sheet for the supply of 110,000 tonnes of spodumene concentrate from Core's Finniss Lithium Project. Tesla will support Core in the planned development of lithium chemical processing facilities.
Australian lithium manufacturer Core Lithium Ltd announced that it has entered into a legally binding agreement with Tesla, Inc. for the supply of up to 110,000 tonnes of Li2O spodumene concentrate from the Finniss Lithium Project over a term of four years, with pricing referenced to the market price for spodumene concentrate, subject to a price floor and ceiling (Term Sheet).
In September 2021, the company's Board of Directors made a final investment decision to commence development of the wholly owned Finniss project located near Darwin in the Northern Territory. The company is fully funded to deliver the Finniss Project, which has started construction, through to first lithium concentrate production scheduled for Q4 2022.
The list of conditions provides for the completion of negotiations by the parties and the signing of a final agreement on the purchase of the product by August 27, 2022, which must include a start date for deliveries by July 31, 2023 (subject to extension by mutual agreement).
Core Lithium Management Director Stephen Biggins said:
"The Term Sheet with Tesla is for the supply and delivery of up to 110,000 dry metric tons of spodumene concentrate over a term of 4 years. This adds to the previously announced binding offtake agreements with existing customers over 4 years.
“Subject to execution of a definitive agreement, Core’s supply to Tesla is scheduled to commence in 2H 2023 and will cease on the date that is 4 years after commencement of supply or until a total of up to 110,000 dry metric tonnes has been delivered.
“Core Lithium is thrilled to have reached this agreement with Tesla and look forward to further growing this relationship in the years to come. Tesla is a world-leader in electric vehicles and its investment in offtake and interest in our expansion plans for downstream processing are very encouraging.”
Core's strategy for Finniss currently includes a potential Stage 3 expansion. This stage is based on a long-term plan for the development of lithium chemistry in the Northern Territory. Tesla has agreed, subject to a definitive agreement, to provide Core with additional support to help successfully complete its Stage 3 expansion and bring Core's lithium chemistry product into Tesla's supply chain.
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