Kidman Resources, one of the major lithium developers of Australia, has apparently announced to have inked a contract with Tesla Inc. to supply lithium for its electric car batteries. As per reliable sources, the announcement is the latest in a series of agreements that are being signed by automotive and transportation industry giants with lithium providers to secure supplies of the mineral as the demand swells for electric vehicles.
Reportedly, the agreement comes less than a fortnight after the lithium developer finalized a site to build a lithium processing plant at Kwinana in Western Australia. The facility would be jointly developed with Kidman’s joint venture affiliate Sociedad Quimica y Minera de Chile (SQM), cite sources.
Reliable reports state that the latest deal features two three-year term options and has been signed for a three-year period on a ‘fixed-price take-or-pay basis’.
For the record, lithium has gained significant recognition as a vital ingredient in rechargeable batteries that power electric vehicles. The prices of lithium carbonate have witnessed two-fold increase as compared to the costs in the year 2015, since the demand for electric cars such as General Motors Co’s Chevy Bolt and Tesla’s Model X has considerably soared in the recent times, cite sources familiar with the matter.
Commenting on the latest deal, the chief analyst of the Perth-based corporate stockbroking firm Argonaut, Matthew Keane was quoted stating that it won’t be startling if some of the foremost names from the automotive and transportation market, such as Daimler AG, sign an agreement with Kidman Resources. He further stated that the deal has been inked in a low sovereign risk jurisdiction with a supportive government in place and a good partner in terms of SQM.
According to a statement released by Kidman Resources, the Melbourne based company expects the new processing facility to commence its operations by 2021.