Tesla Motors (TSLA) has signed a long-term supply accord for lithium hydroxide with Bacanora Minerals and Rare Earth Minerals, the owners of the Sonora Lithium Project in Northern Mexico.
On the condition that over the next two years, the Sonora Lithium Project reaches certain performance milestones and successfully passes product specification qualifications, Tesla will buy lithium hydroxide to feed the manufacturing of batteries at Tesla’s Gigafactory in Nevada.
One of the key milestones will be the confirmation that the Sonora Lithium Project will be able to supply lithium hydroxide in accordance with volumes and timeframes to be established by Tesla. The accord has an initial five year term commencing from the date of the first order by Tesla, with an option to extend for a further five years. Other financial terms weren’t disclosed.