(Reuters) – China’s Sichuan Yahua Industrial Group Co Ltd said on Tuesday it had signed a deal to supply battery-grade lithium hydroxide to U.S. electric vehicle manufacturer Tesla Inc for the next five years.
Yahua, which is based in southwest China’s Sichuan province, did not provide tonnage figures but, in a filing to the Shenzhen Stock Exchange, put the total value of the contract at $630-880 million over 2021-25.
Tesla, which started delivering the first vehicles from its gigafactory in Shanghai in December last year, already sources lithium – a key ingredient in EV batteries – from China’s Ganfeng Lithium, one of the world’s biggest producers of the commodity.
Tesla did not immediately respond to a request for comment on Tuesday.
In May this year, Yahua put a 20,000 tonnes per year lithium hydroxide plant into operation, more than doubling its previous capacity, even as prices languished at multi-year lows amid oversupply and a knock to lithium demand brought about by the coronavirus pandemic.
Reporting by Tom Daly; additional reporting by Yilei Sun, editing by Louise Heavens