The Sayona Quebec lithium mine has landed quite a client to resume operations later this year: automaker Tesla.
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Sayona's U.S. partner, Piedmont Lithium, announced on Tuesday that it has amended its sales contract with Tesla to specify that the raw material will come from the La Corne open-pit mine in Abitibi.
Until now, Piedmont had to supply Tesla with spodumene from a project under development in North Carolina, but it faces strong opposition from citizens.
"We are pleased to be able to partner with Tesla to supply North American produced lithium," Piedmont CEO Keith Phillips said in a statement.
"This agreement helps ensure that these critical Quebec resources remain in North America," he added.
Two years ago, Piedmont acquired a 25% stake in Sayona Quebec, owner of the La Corne facilities and other lithium deposits in Quebec. Australian company Sayona Mining owns the remaining 75%.
First deliveries this year
Production of spodumene concentrate should resume at La Corne during the first half of 2023. The first commercial deliveries are scheduled for this fall.
Under an agreement with Sayona, Piedmont can purchase up to 113,000 metric tons per year of lithium from the Quebec mine at prices within a predetermined range.
The new version of the contract concluded with Tesla also provides that Elon Musk's group will pay the market price for the lithium it will receive from Piedmont / Sayona. The first version of the agreement referred to "fixed prices". However, lithium prices have surged since the end of 2020.
The contract is for three years with the possibility of renewal for three more years.
Good reaction on the stock market
Investors have welcomed the new pact signed with Tesla: on the stock market, the stock of Sayona Mining jumped 10% yesterday and that of Piedmont, 15%.
Cindy Valence, spokesperson for Sayona Quebec, assured the Journal yesterday that the sale of spodumene to Tesla did not call into question the company's plan to carry out the second processing of lithium in the province within five years.
Sayona is the third company trying to revive lithium mining in La Corne. The Ontario firm Canada Lithium and a Chinese consortium have failed to do so since 2012. The mine was in operation from 1955 to 1965.