Tesla Inc. will have to pay more for the lithium that powers its electric cars because a supplier changed their contract as the price of the metal continues to rise.

A statement released Tuesday said that Piedmont Lithium Inc. will now send the EV giant an extra 125,000 metric tonnes of lithium concentrate from the second half of this year until the end of 2025. The statement says that, unlike previous deals, Piedmont’s deal with Tesla is based on a mechanism that lets prices change based on the market.

Analyst David Deckelbaum at Cowen & Co. says that the change in the supply agreement between Piedmont and Tesla is “significant” because the electric vehicle (EV) giant usually has fixed prices for the materials it needs to make batteries. “As more contracts shift toward variable pricing, Tesla’s lithium costs inevitably move higher,” Deckelbaum said in an email.

As the biggest buyer in a market full of new miners, Tesla has had a lot of power to set terms, usually locking in long-term deals with fixed prices. But the prices of key battery materials like lithium keep going up, and traditional automakers are working hard to get these metals. This is slowly changing the situation.

In the past few years, the price of lithium has gone up 1,200% because supply hasn’t been able to keep up with demand. That hurts manufacturers, who have had to raise prices as a result. BloombergNEF says that the average price of a lithium-ion battery pack went up by 7% in 2022. This is the first time the price has gone up since the group started keeping track in 2010.

The first deal between Piedmont and Tesla was announced more than two years ago. At that time, lithium prices were at an all-time low because of the pandemic, which lowered demand for EVs at a time when there was plenty of supply.

Cowen’s Deckelbaum says that the new supply deal with Tesla should give Piedmont “highly attractive margins.” Based on the current spot price of lithium hydroxide, he thought that the deal could increase the company in Belmont, North Carolina’s cash flow by $550 million per year.

US Government Invests in New Battery Metals Supply Amid EV Boom

In the United States, there is currently only one producing lithium mine – Albemarle’s Silver Peak in Nevada, a state being touted as the world’s top mining jurisdictions. Luckily, the Biden Administration is investing billions to fund battery metals projects. 

Among those under development is Noram Lithium Corp’s (TSXV:NRM) (OTCQB:NRVTF) Zeus Lithium Project, which is located just one mile away from the only lithium operation in the US. 

Noram has continued to aggressively advance its Zeus Project from the development-stage level through to the completion of a Pre-Feasibility Study (PFS), which is already underway. The Zeus project contains a 43-101 measured and indicated resource estimate of 363 million tonnes with 923 ppm lithium and 827 million tonnes with 884 ppm lithium using a cut-off of 400 ppm Li. 

The company recently highlighted the milestones is achieved in 2022, including the completion of the 12-hole Phase VI exploration program at Zeus and the closing of a US$14 million strategic financing with Waratah Capital Advisors and Lithium Royalty Corp., both of which will assist with the completion of the PFS.

Noram Lithium also bolstered its leadership team with the appointment of Greg McCunn as Chief Executive Officer to lead the company through the next stages of development at Zeus. McCunn has served as CEO for several TSX and NYSE-listed companies including Alio Gold and Galiano Gold and has raised over $600 million in equity and debt financing from the Canadian and US capital markets, completed over $1 billion in M&A transactions, and put three mines into production on three different continents.

For more information on Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) and its Zeus Lithium Project, please visit this link or the company’s website.

SOURCE Noram Lithium Corp (TSXV:NRM) (OTCQB:NRVTF).

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6) This document contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, (collectively, “forward-looking statements”), which reflect management’s expectations regarding Noram Lithium Corp.’s future growth, future business plans and opportunities, expected activities, and other statements about future events, results or performance. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to: (a) revenue generating potential with respect to Noram Lithium Corp.’s industry; (b) market opportunity; (c) Noram Lithium Corp.s business plans and strategies; (d) services that Noram Lithium Corp. intends to offer; (e) Noram Lithium Corp.’s milestone projections and targets; (f) Noram Lithium Corp.’s expectations regarding receipt of approval for regulatory applications; (g) Noram Lithium Corp.’s intentions to expand into other jurisdictions including the timeline expectations relating to those expansion plans; and (h) Noram Lithium Corp.’s expectations with regarding its ability to deliver shareholder value. Forward-looking statements are not a guarantee of future performance and are based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this document including, without limitation, assumptions about: (a) the ability to raise any necessary additional capital on reasonable terms to execute Noram Lithium Corp.’s business plan; (b) that general business and economic conditions will not change in a material adverse manner; (c) Noram Lithium Corp.’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; (d) Noram Lithium Corp.’s ability to enter into contractual arrangements with additional Pharmacies; (e) the accuracy of budgeted costs and expenditures; (f) Noram Lithium Corp.’s ability to attract and retain skilled personnel; (g) political and regulatory stability; (h) the receipt of governmental, regulatory and third-party approvals, licenses and permits on favorable terms; (i) changes in applicable legislation; (j) stability in financial and capital markets; and (k) expectations regarding the level of disruption to as a result of CV-19. Such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of Noram Lithium Corp. to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: (a) Noram Lithium Corp.’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; (b) public health crises such as CV-19 may adversely impact Noram Lithium Corp.’s business; (c) the volatility of global capital markets; (d) political instability and changes to the regulations governing Noram Lithium Corp.’s business operations (e) Noram Lithium Corp. may be unable to implement its growth strategy; and (f) increased competition.

Except as required by law, Noram Lithium Corp. undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future event or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Neither does Noram Lithium Corp. nor any of its representatives make any representation or warranty, express or implied, as to the accuracy, sufficiency or completeness of the information in this document. Neither Noram Lithium Corp. nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this document by you or any of your representatives or for omissions from the information in this document.

7) Any graphs, tables or other information demonstrating the historical performance or current or historical attributes of Noram Lithium Corp. or any other entity contained in this document are intended only to illustrate historical performance or current or historical attributes of Noram Lithium Corp. or such entities and are not necessarily indicative of future performance of Noram Lithium Corp. or such entities.

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