China’s Sichuan Yahua Industrial Group Co. stated on Tuesday it had signed a deal to produce battery-grade lithium hydroxide to Tesla Inc. for the following 5 years.

Yahua, which relies in southwest China’s Sichuan province, didn’t present tonnage figures however, in a submitting to the Shenzhen Inventory Change, put the overall worth of the contract at $630 million to $880 million over 2021-25.

Tesla, which began delivering the primary automobiles from its plant in Shanghai in December final 12 months, already sources lithium — a key ingredient in EV batteries — from China’s Ganfeng Lithium, one of many world’s greatest producers of the commodity.

Tesla didn’t instantly reply to a request for touch upon Tuesday.

In Could, Yahua put a 20,000 tons per 12 months lithium hydroxide plant into operation, greater than doubling its earlier capability, whilst costs languished at multi-year lows amid oversupply and a knock to lithium demand led to by the coronavirus pandemic.