US Rare Earth Minerals says it has no supply deal with Tesla

U.S. Rare Earth Minerals calling supply deal with Tesla Motors a ‘bluff’

Tesla Motors’ CEO Elon Musk unveiled in May a new division, called Tesla Energy, focused on the production of batteries (Image from archives)

U.S. Rare Earth Minerals (OTCQB:USMN) said Monday management was “surprised” to read all over the news of a supply agreement the company supposedly has with with Tesla Motors (NASDAQ:TSLA) for the  electric car maker lithium-ion batteries.

“USMN has no agreements of any kind with Tesla Motors Inc,"acting chairman and CEO Larry "Bear" Bonafide said in a statement. He added that USMN had no part in the press release and would take no responsibility for it.

The agreement was in fact with London-listed Rare Earth Minerals (LON:REM) and Bacanora Minerals (CVE:BCN)(LON:BCN) as first reported by the Wall Street Journal.

Tesla is building a $5 billion battery factory in Nevada, which aims to reduce battery costs by 30% or more, partly by bringing in in-house materials provided by REM and Bacanora.

The statement added that the deal between Tesla and the two companies would give the electric car maker access to below-market-rate lithium in exchange for minimum purchase amounts over a five-year period.

The two companies in partnership with Tesla will have rights to land in northern Mexico, where lithium can be obtained from mineral-rich clay.

Click here for the Bacanora press release and here for Rare Earth Minerals' announcement of the agreement.

(Featured image: Tesla Motors corporate headquarters in Palo Alto California by Windell Oskay)