Piedmont Lithium (NASDAQ:PLL, ASX:PLL.AX) on Monday said it signed a five-year deal with Tesla (TSLA) to supply high-purity lithium ore mineral to the U.S. electric carmaker, prompting an 83% surge in the Australian lithium miner’s shares.
Piedmont Lithium is an emerging lithium chemicals company focused on the development of its 100%-owned Piedmont Lithium Project in North Carolina, with the goal of becoming a strategic domestic supplier of battery-grade lithium hydroxide and other chemicals to the growing electric vehicle and battery storage markets in the United States.
The initial five-year agreement implies that Piedmont will supply about a third of its planned 160,000-tonnes-per-year spodumene concentrate produce from its deposits in North Carolina. Both companies have an option to extend the deal for another five years.
Piedmont Lithium (PLL) & Tesla (TSLA)
The deal comes on the heels of Tesla’s “Battery Day” presentation last week when Chief Executive Elon Musk shared his vision of novel, proprietary Tesla batteries, following which Tesla stock lost more than $30 billion in market value.
Piedmont said in a statement that the agreement marked the beginning of the its first U.S. domestic lithium supply chain and that talks are ongoing over other sales arrangements.
Tesla did not respond to a Money Midnight request for comment outside regular business hours.
The deal is conditional upon both companies agreeing to start deliveries between July 2022 and July 2023, the Australian firm said.
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Shares of Piedmont Lithium (PLL) appear to be a very good investment option, the Money Midnight Indicator is expecting its price to increase considerably in the next several years. The majority of the metrics point to this investment being highly attractive.