Core Lithium [ASX:CXO] shares are up by almost 16% today after signing a lithium supply deal with electric carmaker Tesla Inc [NASDAQ:TSLA].
Core Lithium is a lithium developer located near Darwin in the Northern Territory. Their flagship project is the Finniss Lithium Project, of which they own 100%.
What’s the agreement with Tesla?
Today, Core Lithium signed a legally binding Term Sheet with Tesla to supply them with lithium spodumene concentrate from their Finniss Lithium Project.
According to the deal, Core Lithium will supply up to 110,000 dry metric tonnes of spodumene concentrate to Tesla over a four-year period.
Core Lithium expects to produce their first lithium from the Finniss project in the fourth quarter of 2022, and to start supplying Tesla before 31 July 2023.
The lithium project also includes a potential stage 3 expansion to build a downstream lithium chemical processing plant in the Northern Territory. Core Lithium said today that Tesla has agreed to support them in the development of this stage.
This isn’t the first lithium supply deal for Core Lithium.
In August, they signed a binding offtake agreement with lithium producer Ganfeng Lithium for the supply of 75,000 metric tonnes of spodumene concentrate over four years and a $34 million equity investment.
This is the latest in a string of deals for Tesla
Tesla has recently signed deals with Liontown Resources [ASX:LTR] for lithium supply and with Syrah Resources [ASX:SYR] for graphite supply.
As EVs continue to roll out at a fast pace, battery and automakers are scrambling to secure supply of EV battery metals like lithium.
GlobalData expects global demand for lithium to double by 2024, driven by growing battery manufacturing capacity, mainly in China.
Core Lithium shares are up 15.76% at the time of writing and are trading at 95.5 cents, up from yesterday’s close at 82.5 cents.
If you are interested in lithium stocks, check out our free comprehensive guide on ‘How to Invest in ASX Lithium Stocks Ahead of the Clean Energy Revolution’.
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Best,
Selva Freigedo,
For Money Morning
