Piedmont Lithium (PLL) Stock Rockets On Agreement with Tesla (TSLA)

Piedmont Lithium Limited PLL Stock News

Piedmont Lithium Limited (NASDAQ: PLL) is rocketing in the market this morning, trading on gains that are better described as multiples than percentages in the premarket hours. The gains coma after the company announced that it entered into an agreement with Tesla (NASDAQ: TSLA). Here’s what’s going on:

Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!

PLL Stock Is Flying After Agreement With TSLA

In the press release, Piedmont Lithium announced that it entered into a binding agreement with Tesla. The agreement surrounds the supply of spodumene concentrate, also known as SC6, from the company’s North Carolina deposit.

PLL explained that the initial agreement will span a term of five years. During this time, Tesla is under a fixed price binding purchase commitment from the delivery of the first product. Moreover, the agreement may extend by mutual agreement for a second five year term.

Importantly, under the agreement, Tesla has agreed to purchase about one third of the planned SC6 production over the course of the next five years. Moreover, Tesla has the option to increase deliverables should its demand for SC6 climb beyond what this agreement provides.

In the release, the company said that the agreement is contingent upon the two parties agreeing to a start date for deliverables based on the development schedules of both parties. In a statement, Keith D. Phillips, President and CEO at PLL, had the following to offer:

We are excited to be working with Tesla, which represents the start of the first US domestic lithium supply chain and a disruption to the current value chain. The Agreement highlights the strategic importance of Piedmont’s unique American spodumene deposit and confirms the trend toward spodumene as the preferred feedstock for the lithium hydroxide required in high-nickel batteries.

We will now accelerate our mine/concentrator development to support Tesla’s plans, work to further expand our mineral resources, and potentially increase our planned annual spodumene concentrate production capacity. We will simultaneously be advancing our plans to produce lithium hydroxide in North Carolina, using a combination of internally produced spodumene concentrate as well as material sourced from other producers around the world.

This Is Big News

The fact that Piedmont Lithium entered into a long-term supply agreement with Tesla is overwhelmingly positive news. This agreement will lock in a substantial revenue source for at least the next five years and possibly for 10 years ahead.

At the same time, Tesla is an overwhelmingly popular company. As a result, this agreement won’t just drive revenue for PLL, but also quite a bit of investor interest from investors who may have never heard of the stock prior to the agreement. All in all, there are several good reasons to be excited about PLL stock here.

Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!

Don’t Miss The Next Big Story

Join our free mailing list below to receive real-time news alerts!

Subscribe Today!

* indicates required

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.