The Piedmont Lithium Inc (ASX: PLL) share price is in the red in early trade, down 0.76%.
The ASX lithium stock closed yesterday trading for 66 cents per share and is currently trading at 65 cents per share.
This comes after the company reported on an amended agreement with Tesla Inc (NASDAQ: TSLA).
Here's what investors are mulling over.
Image source: Getty Images
What's the new agreement with Tesla?
The Piedmont Lithium share price is in the red following the announcement the company has amended its agreement to supply United States EV giant Tesla with spodumene concentrate (SC6) from its co-owned North American Lithium project (NAL).
Piedmont Lithium has a 25% interest in NAL, located in the province of Quebec in Canada. Sayona Mining Ltd (ASX: SYA) owns the other 75%.
The new agreement is binding for a three-year term and includes the option to renew for an additional three years. Piedmont has agreed to deliver approximately 125,000 tonnes of SC6 to Tesla beginning in the second half of 2023 and initially running through to the end of 2025.
The price Piedmont Lithium receives for its SC6 will be determined by market prices at the time of each shipment. The miner's offtake agreement with Sayona entitles it to purchase 113,000 tonnes per year or 50% of SC6 production, whichever is greater.
The company expects to restart spodumene concentrate production at NAL in the first half of 2023. It forecasts that the first commercial shipments will commence in the third quarter of 2023.
Commenting on the amended agreement that's so far failed to lift the Piedmont Lithium share price today, CEO Keith Phillips said:
We are pleased to be able to partner with Tesla to supply lithium resources produced in North America. The electric vehicle and critical battery materials landscape has changed significantly since 2020 and this agreement reflects the importance of – and growing demand for – a North American lithium supply chain.
This agreement helps to ensure that these critical resources from Quebec remain in North America and support the mission of the Inflation Reduction Act to bolster the US supply chain, the clean energy economy, and global decarbonisation.
Piedmont Lithium share price snapshot
As you can see in the chart below, the Piedmont Lithium share price has struggled over the past 12 months, down 15%. Longer term, however, the ASX lithium stock is up 198% over five years.
