Piedmont Lithium on Monday said it had signed a five-year deal with Tesla to supply high-purity lithium ore mineral, prompting a surge in the Australian lithium miner's shares, Reuters reported.

The news agency said the initial five year agreement implied Piedmont woukd supply about a third of its planned 160,000 tonnes per year spodumene concentrate produce from its deposits in North Carolina. Both companies have an option to extend the deal for another five years.

Shares of the Australian miner touched their highest since May 2007.

Reuters noted the deal followed Tesla's 'Battery Day' presentation last week when chief executive Elon Musk shared his vision of novel, proprietary Tesla batteries, following which Tesla stock lost more than US$30bn in market value.

Piedmont said in a statement cited by Reuters the agreement marked the beginning of its first US domestic lithium supply chain and that talks were ongoing over other sales arrangements.

The deal was conditional upon both companies agreeing to start deliveries between July 2022 and July 2023, the Australian firm added.