Tesla is reportedly in talks with Chilean government authorities about a lithium deal with state-run copper miner Codelco, said a report from a local newspaper on Thursday. Lithium is a vital raw material for the electric car batteries that are used in Tesla cars.

Tesla In Talks On Lithium Deal With Chilean State Miner [REPORT]

No agreement yet?

Without citing sources, the financial newspaper Pulso said, “Top executives from the company visited Chile to meet with government authorities and suggest an agreement with Codelco.”

In response, Codelco said no agreement had been reached. “A formal process for exploring for lithium has not started, nor has the board even taken a decision on that,” the firm said.

Codelco, who dominates the copper market globally, also deals in deposit offshoots like silver, but the company has no connection to lithium as of now. However, it did say previously that it may enter the lithium industry if it gets a lucrative opportunity. The time may be good for Codelco to diversify as copper prices are at six-year lows, but the relatively small size of the lithium industry is discouraging Codelco executives, says Reuters.

Other Chile-based firms such as Li3 Energy are also believed to be searching for South American partners for lithium ventures. Shares of Chile’s SQM jumped in February 2014 after Tesla revealed plans to construct the so-called gigafactory in the US. SQM is biggest global producer of lithium.

Tesla, which needs a big supply of lithium, has already partnered with Canadian Bacanora Minerals and British Rare Earth Minerals in Mexico for the lithium. As of now, there have been no comments from Tesla over the report from Pulso.

Tesla pushing up lithium demand

Many experts believe the lithium market will explode even at a time when other commodities are floundering or completely collapsing. Among all this, Nevada is emerging as the front line in this upcoming American lithium boom, thanks largely to Tesla and its upcoming gigafactory.

A few months ago, Jeb Handwerger, founder of Gold Stock Trades, told Resource Investor, “This is just the beginning. We’re in the early stages of a revolution in powering transportation and homes. This really is disruptive technology.”

Handwerger expects the battery segment to grow 20% annually.

On Thursday, Tesla shares closed up 0.31% at $232.71. Year to date, the stock is up by almost 5%, while in the last one month, it is up by almost 12%.