Tesla begins Gigafactory sourcing with lithium supply deal

A new lithium project in northern Mexico has received the first seal of approval to supply the Tesla Motors Gigafactory.

London-based Bacanora Minerals and Rare Earth Minerals have received the go-ahead to supply lithium hydroxide to Tesla's lithium-ion battery megafactory from its clay deposit in Mexico's north-west should the new project reach production.

Tesla have agreed a 5-year lithium hydroxide contract to "purchase agreed minimum tonnages with estimate forecasted maximum tonnages to be determined following delivery of future production orders".

While no volumes were revealed, Bacanora explained that its planned processing plant capacity will have a minimum lithium hydroxide output of 35,000 tpa and a maximum of 50,000 tpa.

Tesla expected to consume majority

In Benchmark's estimates, should the product pass Tesla's specification and quality control tests, the company could consume as much as 80% of the project’s total output. It is an expectation that Bacanora would keep some tonnages for the spot market.

It is also expected that Tesla's deal would be at a significant discount to market prices such is the scale of the order. Should Tesla regularly purchase over 10,000 tpa of lithium hydroxide, it will be the largest battery consumer in the world…Continue reading for free > click here for Benchmark's Blog. 

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