China's largest lithium compounds producer, Jiangxi Ganfeng Lithium, has signed a deal to supply a fifth of its production to Tesla.
Under the terms of the agreement, Tesla will designate its battery suppliers to buy lithium-hydroxide products from Ganfeng, according to a Shenzhen exchange filing on 21 September.
The agreement runs from 2018 to 2020 and could be extended by three years.
Tesla may need as much as 28,000 tons of lithium hydroxide annually from late next year— based on battery output at its Nevada facility reaching the equivalent of 35 gigawatt hours, according to Benchmark Mineral’s forecasts.
Last August, Ganfeng confirmed it had agreed a multi-million-dollar investment package to partner Canada’s Lithium Americas in developing and operating Argentina’s Cauchari-Olaroz lithium brine project.