- Through a binding term sheet, Core Lithium (CXO) has agreed to supply lithium spodumene concentrate to Tesla
- Under the proposed four-year deal, Core will supply up to 110,000 tonnes of concentrate from its Finniss lithium project located in the Northern Territory
- The company says Tesla has also agreed to support Core in its planned development of downstream lithium chemical processing at the project
- The term sheet deal is subject to negotiations and execution of a definitive product purchase agreement by August 27
- CXO shares climb 10.9 per cent higher to 91.5 cents
Core Lithium (CXO) has entered into a binding term sheet agreement to supply lithium spodumene concentrate to electric vehicle behemoth Tesla.
Core’s shares have jumped more than 10 per cent on the news.
Under the proposed four-year deal, Core said it would supply up to 110,000 tonnes of concentrate from its developing Finniss lithium project in the Northern Territory.
The term sheet is subject to both parties completing negotiations and the execution of a definitive product purchase agreement by August 27, 2022.
Core said a supply commencement date has been slated for before July 31, 2023, subject to extension by mutual agreement.
The term sheet with Tesla comes after Core’s announcement in September last year that it had made a final investment decision to begin development of the Finniss project.
The company said it was fully funded to develop the project and construction has already started, with first lithium concentrate production scheduled for the fourth quarter of this year.
Core said its strategy for the project included a stage-three expansion based on a longer-term plan for the development of downstream lithium chemical processing.
Tesla has reportedly agreed to provide additional support to Core to assist with the expansion plan, as well as incorporate its lithium chemical product into Tesla’s supply chain, subject to execution of a definitive agreement.
CXO shares were trading 10.9 per cent higher at 91.5 cents at 11:12 am AEDT.