Tesla Motors Inc recently struck a deal to procure lithium from Mexico for its Gigafactory. The deal was formally announced in a press release, but whether or not any such deal exists is still not clear.
Confusion over Tesla lithium deal
A recent report from the Wall Street Journal claimed that Tesla has entered into a long-term contract with Sonora Lithium Project Partners, a joint venture between the Bacanora Minerals and Rare Earth Minerals for extracting lithium from northern Mexico. Bacanora has confirmed the deal in a press release, but Rare Earth Minerals has denied any such deal.
The reported details of the deal were the two firms will supply the required lithium to Tesla. Another point was that both the firms will have to raise funding for the project, and develop the mine and a lithium processing facility as well.
Last week, Bacanora said the total capacity of the project is 50,000 tons of lithium a year, but initially it will be 35,000 tons a year. However, on Monday, Rare Earth Materials said “no agreements of any kind with Tesla Motors,” and that “we are not currently engaged in the specific mining and sale of Lithium.”
Such confusion may be due to the fact that there are many firms with name Rare Earth Minerals, says Autoblog. Based on the leaked reports, another possibility is that the companies could be in talks, but no deal has been reached yet.
So far, there has been no comment on it from Tesla Motors Inc , but on being asked by AutoblogGreen, the EV firm referred to the Bacanora press release. Lithium is key for Tesla’s success as the firm is counting on its Gigafactory to lower the cost of lithium-ion battery by as much as 30%.
Even if the deals does not hold up, Tesla will still have many options to procure lithium. In the US, Silver Peak is the only active source of lithium, but the mine is close to its lifespan, says a report Las Vegas Sun. Tesla could also get the material from Western Lithium, which is setting up a mine in Nevada since 2009. For now, the mine is not in operation, but is in the same phase as the Mexico one.
On Tuesday, Tesla Motors Inc shares closed down 4.19%. Year to date, the stock is up over 7% while in the last one-year, they are down over 11%.