Tesla Finalizes Lithium Deal Near Nevada Site

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Tesla Motors could soon acquire lithium from a site closer to its home. The firm secured a supply deal from a site not far from its so-called gigafactory in Nevada.

Very close to Tesla’s Nevada factory

On Wednesday, Pure Energy Minerals, which is based in Vancouver, announced an agreement with Tesla for supplying the electric car maker with lithium hydroxide for use in its batteries. The lithium will be procured from Pure Energy’s Nevada Lithium Brine Project at Clayton Valley, which is just 3.5 hours away from Tesla’s gigafactory 1 site east of Reno-Sparks, says RGJ. The only operation producing lithium in the United States is Silver Peak.

Robert Mintak, CEO of Pure Energy, said the deal with Tesla will serve as a key milestone for its lithium brine project and also for its business development model. “We think the project; its Nevada location and Pure Energy’s green, clean, innovative development model provide a unique opportunity as a domestic lithium source. It’s been a hectic day (and) we’re extremely excited working with Tesla Motors,” Mintak told RGJ on a phone.

Pure Energy plans to conduct a mining study at the site to make sure it is not only technically feasible but economically viable as well. If Pure Energy is successful in meeting all the terms of its agreement with Tesla regarding the project, like the required standards for lithium hydroxide quality and product delivery, then the deal will be finalized for a five-year period. Tesla’s timetable synchronizes well with the project development schedule of Pure Energy, Mintak said.

All to lower battery cost

Pure Energy will offer resources to Tesla at a price below the current prevailing price in the market, and this could become the key sticking point for Tesla as it strives to make batteries cheaper. Tesla made the major decision to build the 10 million square-foot gigafactory with the intention of lowering the overall cost of electric car batteries. This building is expected to be the largest in the world. Tesla’s lithium needs will involve multiple sources, and only a portion of it will be covered by the Pure Energy deal.

Tesla also inked a five-year deal for procurement of lithium from the Sonora Lithium Project in Mexico, which is yet another site under development. The Mexico deal is not exclusive and has many contingencies, Tesla CEO Elon Musk tweeted earlier this month. Musk also said the firm is eyeing lithium sources in Nevada as well.

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