Core Lithium’s largest shareholder and Tesla supplier Yahua to double lithium output

Core Lithium Ltd’s (ASX:CXO) largest shareholder and a key supplier to Tesla – China’s Sichuan Yahua Industrial Group (Yahua) – is planning to more than double its lithium hydroxide production capacity. Yahua revealed this week that it will invest to increase the output of its Yaan plant from 20,000 tonnes per annum (tpa) to 50,000 tpa of battery-grade lithium hydroxide. Yahua and Tesla signed an agreement in December 2020 for Tesla to purchase US$630 million to US$880 million of battery-grade lithium hydroxide over a five-year period. Binding offtake agreement in place A significant portion of Yahua’s lithium concentrate supply requirements for Yaan can be met by Core. Core and Yahua have signed a binding offtake agreement for Core to supply 75,000 tpa of lithium spodumene concentrate. The Yahua offtake represents about 40% of Finniss’ proposed 175,000 tpa production. Worldwide demand for lithium is accelerating Core is the most advanced new Australian lithium developer on the ASX and leading the supply of new global lithium production at a time when worldwide demand for this key battery component is again accelerating. The company’s 100%-owned Finniss Project is one of the most capital-efficient lithium projects in Australia and has arguably the best logistics chain to markets of any Australian lithium project. Core’s project lies within 25 kilometres of port, power station, gas, rail and one hour by sealed road to workforce accommodated in Darwin as well as Darwin Port - Australia’s nearest port to Asia.