What Happened
Tesla will buy 100,000 dry metric tonnes (DMT) of the lithium concentrate in the first year and up to 150,000 DMTs annually thereafter, Liontown Resources said.Spodumene is considered a key material that goes into making batteries for electric vehicles.
Large quantities of lithium spodumene concentrate have been found in Africa, Australia, and North America.
The supply deal is subject to Liontown commencing commercial production at the Kathleen Valley Lithium Project by 2025.
The Kathleen Valley project is a high-grade lithium-tantalum project being developed near Perth, Western Australia.
Why It Matters
Tesla and its legacy rivals such as General Motors Co. and Ford Motor Co. are rushing to develop supply chains and secure raw materials such as lithium and nickel for their electric vehicle battery needs.The global demand for lithium is expected to jump to one million tonnes by 2025 and three million tonnes by the end of the decade as more and more legacy automakers switch to electric vehicles.
Earlier this year, Tesla agreed to buy nickel supplies from Talon Metals Corp’s Tamarack mines in central Minnesota, a first such U.S.-based nickel supply deal for the Austin, Texas-based EV company.
