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PROJECT|Bearing
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Tesla warns miner of possible legal claim on failed supply talks

17th August 2023

By: Bloomberg

  

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Australia’s Core Lithium said Tesla notified the miner of a potential legal claim after their negotiations for a supply deal fell through in 2022.

The potential legal claim is related to a binding term sheet in negotiations with the electric-vehicle giant for the supply of spodumene concentrate, Core said Wednesday in a stock exchange statement. The supply would be sourced from Core’s Finniss lithium project in Australia’s Northern Territory.

The Adelaide-based miner and Tesla failed to clinch a pact after nearly seven months of negotiations last year against a backdrop of rocketing prices for the lithium-bearing raw material that is crucial for EV batteries.

Core said it received notice that Tesla intends to “avail itself of all available legal remedies” if the parties are unable to resolve the matter. “Should those efforts fail, each party intends to avail itself of all legal and equitable remedies,” according to the statement.

Core said in March 2022 it was working on a deal with Tesla for the supply of up to 110 000 tons of spodumene concentrate, with terms referenced to market prices. The companies passed an October 2022 deadline for concluding the terms of a four-year deal without any agreement.

Prices of spodumene soared during 2022, more than tripling, according to data from Benchmark Mineral Intelligence. Core said in October last year it was well positioned to take advantage of strong global demand and constrained lithium supply.

Edited by Bloomberg

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