Australia's Liontown Resources said on Wednesday that it had signed a five-year agreement with Tesla to supply spodumene concentrate to the electric carmaker, sending the lithium miner's share price up nearly 20 per cent.
Starting from 2024, Tesla will buy 100000 dry metric tons of (DMT) concentrate in the first year and increase to 150000 dry metric tons of (DMT) per year in subsequent years.
Lithium prices have soared over the past few years, and as carmakers prefer electric cars, suppliers are scrambling to meet lithium demand, which is about eight times higher than at the beginning of 2021.
Liontown will supply lithium through its flagship Kathleen Valley Lithium project in Western Australia, which is expected to start commercial production in 2025. The supply to Tesla will account for about 1/3 of the project's annual capacity.
Liontown has reached a lithium supply agreement with the battery department of South Korea's LG Chem, which is part of the project.
Liontown shares rose 19.8 per cent to A $1.665, the biggest intraday gain since September 13, 2021.
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