Australian company Core Lithium Ltd has entered into a legally binding term sheet with Tesla Inc for the supply of up to 110,000 tonnes of lithium oxide spodumene concentrate from the Finniss Lithium Project over a term of four years, with pricing referenced to the market price for spodumene concentrate and subject to a price floor and ceiling.
The agreement follows Core Lithium’s recent final investment decision to begin development of its wholly owned Finniss project, located near Darwin in the Northern Territory.
Construction on the project has started and the company is fully funded to deliver the project through to first lithium concentrate production scheduled for quarter four 2022.
The term sheet is subject to the parties completing negotiations and execution of a definitive product purchase agreement by 27 August 2022, which is to provide for a supply commencement date before 31 July 2023.
Core Lithium managing director Stephen Biggins said the term sheet with Tesla added to the previously announced binding offtake agreements with existing customers over four years.
Biggins continued: “Subject to the execution of a definitive agreement, Core’s supply to Tesla is scheduled to commence in [the second half of] 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.”
Core’s strategy for Finniss currently includes a potential stage three expansion, 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 three expansion and the incorporation of Core’s lithium chemical product into Tesla’s supply chain.
