Tesla (NASDAQ: TSLA) inked a "five-year fixed-price binding agreement" to buy lithium from Australian miner Piedmont Lithium (NASDAQ: PLL) this morning, igniting a rally in lithium stocks. Piedmont's own shares are up 210% as of 10 a.m. EDT, while rival producers Lithium Americas (NYSE: LAC) and Livent (NYSE: LTHM) are coming along for the ride, up 17% and 8.4%, respectively.
According to the terms of the agreement, Piedmont will supply spodumene concentrate (a rock rich in lithium) to Tesla for at least five years, but possibly as long as 10 years, extracting the material from its North Carolina mines. Piedmont will earmark approximately one-third of its planned production of 160,000 tons per year for use by Tesla. Tesla may order more than this if it needs more, "at Tesla's option."
There is one condition: Tesla and Piedmont must agree to start deliveries sometime between July 2022 and July 2023.
For further details see:
Why Piedmont Lithium, Lithium Americas, and Livent Stocks Exploded Higher Today