U.S. Rare Earth Minerals calling supply deal with Tesla Motors a ‘bluff’

Tesla Motors’ CEO Elon Musk unveiled in May a new division, called Tesla Energy, focused on the production of batteries (Image from archives)

U.S. Rare Earth Minerals (OTCQB:USMN) said Monday management was “surprised” to read all over the news an alleged supply agreement with Tesla Motors (NASDAQ:TSLA), which would give the electric car maker a key and continued sources of base material utilized to produce lithium-ion batteries for its electric vehicles.

The firm noted it is not currently engaged in the specific mining and sale of lithium, however it acknowledged it was “exploring” its options.

“USMN has no agreements of any kind with Tesla Motors Inc," said in a statement acting chairman and CEO Larry "Bear" Bonafide. He added that USMN had no part in the "misleading" press release and would take no responsibility for it.

On Friday, mining company Bacanora Minerals distributed a new release saying that Tesla was building a $5 billion battery factory in Nevada, which aims to reduce battery costs by 30% or more, partly by bringing in in-house materials suppliers provided by U.S. Rare Earth Minerals and Bacanora.

The questioned statement added that the deal between Tesla and the two companies would give the electric car maker access to below-market-rate lithium in exchange for minimum purchase amounts over a five-year period.

It also claimed that two companies in partnership with Tesla have rights to land in northern Mexico, where lithium can be obtained from mineral-rich clay.

Neither Tesla nor Bacanora Minerals were available for comments at the time this story was written.

(Featured image: Tesla Motors corporate headquarters in Palo Alto California by Windell Oskay)

 

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