Chinese Yahua agrees to five-year deal to supply lithium to Tesla

MANAGEMENT PHOTO: A Tesla store will be unveiled on December 19, 2020 in a mall in San Diego, California, USA. REUTERS / Mike Blake

(Reuters) – China’s Sichuan Yahua Industrial Group Co. Ltd. said on Tuesday it had signed an agreement to supply lithium hydroxide on batteries to the US electric car maker for the next five years.

Yahua, based in Sichuan province in southwest China, did not provide tonnage figures but set the total value of the contract at $ 2021-25 in a submission to the Shenzhen Stock Exchange.

Tesla, which started delivering the first vehicles from its giga factory in Shanghai in December last year, already has lithium – a key ingredient in EV batteries – at Ganfeng Lithium, one of the largest producers in the world.

Tesla did not immediately respond to a request for comment on Tuesday.

In May this year, Yahua commissioned a 20,000 tonne per year lithium hydroxide plant, which more than doubled its previous capacity, even though prices fell at a low year of lower prices amid oversupply and demand for lithium which caused by the coronavirus pandemic.

Reported by Tom Daly; additional reporting by Yilei Sun, edited by Louise Heavens