Core Lithium enters binding Term Sheet with Tesla for lithium supply

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Tesla Inc. will be supplied up to 110,000 metric tonnes of Li2O spodumene concentrate under its term sheet with Core Lithium Ltd.

Core Lithium has announced that it has entered a legally binding Term Sheet with Tesla for up to 110,000 tonnes of Li2O spodumene concentrate supply from the Finniss Lithium Project.

The announcement follows the company’s recent statement that the Board has taken a final investment decision to commence development of the company’s wholly owned Finniss Project, located near Darwin in the Northern Territory.

“Core Lithium is thrilled to have reached this agreement with Tesla and look forward to further growing this relationship in the years to come,” Core Lithium managing director Stephen Biggins said.

“Tesla is a world leader in electric vehicles, and its investment in offtake and interest in our expansion plans for downstream processing is very encouraging.”

The Term Sheet is subject to the parties’ completing negotiations and execution of a definitive product purchase agreement by 27 August 2022, which will provide a supply commencement date before 31 July 2023.

“The Term Sheet with Tesla is for the supply and delivery of up to 110,000 dry metric tonnes of spodumene concentrate over a term of four years,” Biggins said.

“This adds to the previously announced binding offtake agreements with existing customers over four years.”

Tesla has also agreed to provide additional support to Core Lithium’s strategy for Finniss’s stage three expansion. Stage three is based on a longer-term plan for downstream lithium chemical processing in the Northern Territory.

“Core Lithium’s supply to Tesla is scheduled to commence in 2H 2023 and will cease on the date that is four years after commencement of supply or until a total of up to 110,000 dry metric tonnes has been delivered,” Biggins said.

Core Lithium is funded to deliver the Finniss project, which has started construction and will go through to the first lithium concentrate production scheduled for the fourth quarter of 2022.