Australia’s next lithium producer, Core Lithium Ltd (ASX: CXO) has entered into a legally binding Term Sheet with EV leader Tesla, Inc. for the supply of up to 110,000 tonnes of Li2O spodumene concentrate.
The spodumene will be produced from the Finniss Lithium Project in Australia’s NT over a term of four years, with pricing referenced to the market price for spodumene concentrate, subject to a price floor and ceiling.
Tesla has agreed to support Core with planned development of lithium chemical processing capacity.
The signing of the agreement follows Core’s recent that the Board has taken a Final Investment Decision to commence development of the company’s wholly owned Finniss Project, located near Darwin.
Core Lithium Managing Director, Stephen Biggins, said the company is fully funded to deliver the Finniss Project, which has started construction, through to the first lithium concentrate production scheduled for Q4 2022.
The Term Sheet with Tesla is for the supply and delivery of up to 110,000 dry metric tonnes of spodumene concentrate over a term of four years,” Mr Biggins said.
“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 four 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.”
Stage 3 Expansion
Core’s strategy for Finniss currently includes a potential Stage 3 expansion. Stage 3 is based on a longer-term plan for the development of downstream lithium chemical processing in the Northern Territory.
Tesla has agreed, subject to execution of a definitive agreement, to provide additional support to Core to assist with the successful completion of its Stage 3 Expansion and the incorporation of Core’s lithium chemical product into Tesla’s supply chain.