Tesla secures Lithium supply from Australian refinery

Tesla secures Lithium supply from Australian refinery

In a recent press release, Australia-based integrated lithium miner and refiner Kidman Resources Limited has announced an offtake agreement which the company has signed with US-based electric vehicle (EV) manufacturer Tesla Motors. As Tesla has planned major investment in batteries for its electric vehicles, the company needs to secure lithium supplies as well due to increased demand for lithium.

The disclosure by Kidman Resources Limited implies that Tesla has secured lithium supply from the Australia refinery. The move will enable Tesla to meet its raw-material requirements of lithium for the increasingly rapid battery production at its Gigafactory 1 in Nevada, for supporting the production of its Model 3 electric vehicle as well as other energy projects.

Kidman Resources Limited, which has disclosed its offtake agreement with Tesla, has a 50-50 joint venture deal with Chile-based chemicals giant SQM for the production of lithium hydroxide for batteries by exploiting its Mt Holland lithium project in the Earl Grey deposit in Western Australia. Incidentally, some earlier-this-year reports had revealed that Tesla was in talks with SQM to secure lithium in Chile.

In announcing its offtake agreement with Tesla, Kidman Resources Limited said in its recent press release that “the Agreement is for an initial term of three years on a fixed-price take-or-pay basis from the delivery of first product.”

Further revealing that the agreement “contains two 3-year term options,” Kidman Resources Limited said that the other commercial terms of the agreement are “strictly confidential.”