Piedmont Lithium PLL.AX on Monday said it signed a five-year deal with Tesla Inc TSLA.O to supply high-purity lithium ore mineral to the U.S. electric carmaker, prompting an 83% surge in the Australian lithium miner’s shares.
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.
Shares of the Australian miner touched their highest since May 2007.
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.
The deal is conditional upon both companies agreeing to start deliveries between July 2022 and July 2023, the Australian firm said.