The Piedmont Lithium Ltd (ASX: PLL) share price has return from its lengthy suspension with a bang on Monday.
The lithium miner's shares rocketed as much as 83% to a record high of 27 cents at one stage in late morning trade.
At the time of writing, the Piedmont Lithium share price is up 53% to 23 cents.
Why is the Piedmont Lithium share price rocketing higher?
Investors have been fighting to get hold of the company's shares on Monday after it announced a binding sales agreement with electric vehicles giant Tesla.
According to the release, Piedmont Lithium has signed an agreement for an initial five-year term for the supply of spodumene concentrate (SC6) from its North Carolina deposit. The deal includes the option to extend it for a further five years by mutual agreement.
Piedmont and Tesla have agreed a fixed commitment which represents approximately one-third of the lithium miner's planned SC6 production of 160,000 tonnes per annum. It also includes an option for additional SC6 upon Tesla's request.
While no financial terms have been revealed, management notes that these sales are expected to generate between 10% to 20% of its total revenues from its proposed integrated mine-to-hydroxide project for the initial five-year term.
However, it is worth noting that the agreement is conditional upon the two parties agreeing to a start date for deliveries. This will be between July 2022 and July 2023, depending on their respective development schedules.
"Excited to be working with Tesla."
The company's Chief Executive Officer, Keith D. Phillips, revealed that the company was very pleased with the agreement and looks forward to disrupting the current value chain.
He commented: "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. This 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."
