Volkswagen Group has announced a strategic investment in Canadian lithium developer Patriot Battery Metals, acquiring a 9.9% stake for approximately C$69 million (US$48 million).
This move is part of Volkswagen’s broader strategy to secure essential raw materials for electric vehicle (EV) production.
Details of the Investment and Offtake Agreement
Volkswagen purchased shares at C$4.42 each, representing a 66.8% premium over Patriot’s prior closing price, valuing the company at C$625.8 million.
In addition to the equity investment, Patriot Battery Metals has committed to supplying Volkswagen’s battery subsidiary, PowerCo SE, with 100,000 tonnes of spodumene concentrate annually over a ten-year period, commencing upon the start of production at the Shaakichiuwaanaan Project in Quebec.
Spodumene concentrate is a vital lithium-bearing mineral used in manufacturing battery-grade lithium chemicals, essential for EV batteries.
About the Companies
Volkswagen Group is a leading global automobile manufacturer headquartered in Wolfsburg, Germany.
The company operates multiple brands and has been actively transitioning towards electric mobility, investing in battery technology and sustainable vehicle production.
Patriot Battery Metals is a Canadian company specializing in lithium exploration and development.
Their flagship project, the Shaakichiuwaanaan Lithium Project in Quebec, is among the largest lithium pegmatite resources in the Americas.
Strategic Implications
This investment marks Volkswagen’s first direct involvement in the lithium supply chain, underscoring the company’s commitment to securing critical raw materials for its EV lineup.
The Shaakichiuwaanaan Project is expected to supply PowerCo’s battery cell factories in Europe and North America, including a significant facility under construction in St. Thomas, Canada, projected to have an annual production capacity of up to 90 GWh.
Thomas Schmall, Volkswagen Group Board Member for Technology, stated, “This investment represents a milestone in our journey toward a fully electric future. By collaborating with Patriot Battery Metals, we are not only securing key raw materials for cutting-edge, sustainable battery technology but also reinforcing our commitment to North America.”
Ken Brinsden, CEO & Managing Director of Patriot Battery Metals, commented, “The partnership with PowerCo and the investment of Volkswagen Group is a great testament to the performance and quality of our team. At the same time, it emphasizes the world-class status of the Shaakichiuwaanaan Lithium Project and the excellent prospects for Patriot Battery Metals’ future role in the promising global EV supply chain.”
Future Prospects
The collaboration between Volkswagen and Patriot Battery Metals includes a memorandum of understanding to explore further strategic opportunities, such as developing a lithium conversion facility.
This partnership aims to enhance the competitiveness and sustainability of the lithium supply chain, ensuring long-term security for Volkswagen’s EV production.
The transaction is subject to approval from the Toronto Stock Exchange and is expected to close by mid-January 2025.