Australian miner Kidman Resources has signed a three-year fixed-price deal to supply battery raw material to Tesla.
Kidman said details of the take-or-pay agreement for lithium hydroxide, which includes options to extend, remain confidential.
However, Kidman said in an Australian Securities Exchange announcement the agreement equates to less than 25% of the miner’s portion of initial nameplate production.
The Tesla deal was announced days after Kidman confirmed its 50-50 joint venture with the world’s largest lithium producer Sociedad Quimica y Minera de Chile— Western Australia Lithium (WAL)— had agreed to lease a site for a lithium conversion facility in Western Australia.
The site in the Kwinana Strategic Industrial Area, some 30km south of Perth, will be supplied by Kidman’s Mt Holland lithium project some 360km to the east of Kwinana.
WAL plans to commission the refinery in 2021, with an initial annual nameplate capacity of about 44,000 tonnes of lithium hydroxide or 37,000 tonnes of lithium carbonate.
BBB reported earlier this month on warnings to lead industry chiefs that lithium is eating into the worldwide market for “transportation batteries”.
Industry veteran Ray Kubis told the Battery Council International convention in Arizona the impact of pure electric cars and hybrids was forecast to swell lithium’s market share of transportation batteries to more than 60% of a $128 billion market, with lead being left with a rump of $31bn in stop start batteries.