Volkswagen Group and PowerCo Forge Strategic Lithium Supply Partnership with Patriot Battery Metals
PowerCo SE, Volkswagen Group's battery arm, and Patriot Battery Metals Inc. (TSX: PMET | ASX: PMT | OTCQX: PMETF | FSE: R9GA) today unveiled their strategic partnership, marking a significant move into the lithium supply chain. This collaboration highlights PowerCo's strategy to control the entire supply chain, from mining to battery production, ensuring a stable long-term lithium supply through a definitive offtake agreement.
Volkswagen Group is investing US$48 million to acquire a 9.9% stake in Patriot’s outstanding shares. The offtake agreement commits to the annual supply of 100,000 tonnes of spodumene concentrate for 10 years, commencing with the start of production at the Shaakichiuwaanaan Project. This mineral is essential for manufacturing battery-grade lithium chemicals. It represents a critical strategic step in enhancing PowerCo’s battery cell production in Europe and North America, including its gigafactory in St. Thomas, Canada, which will be its most significant, boasting a capacity of up to 90 GWh.
The partnership also continuously supports the development of Patriot’s Shaakichiuwaanaan Lithium Project, one of the most considerable lithium pegmatite resources in the Americas and the eighth largest globally. This high-grade resource aims to secure a long-term supply for PowerCo’s battery cell factories.
PowerCo and Patriot are also setting new industry standards for ESG practices across their joint operations. These standards cover waste disposal, water management, engagement with First Nations communities, and achieving their carbon emission goals. Under a non-binding, non-exclusive Memorandum of Understanding, the companies will explore further collaborative efforts to establish a sustainable, cost-effective, ESG-compliant supply chain for battery-grade lithium chemicals.
Thomas Schmall, Volkswagen Group Board Member for Technology, commented, “This investment is pivotal for our transition to a fully electric future. Collaborating with Patriot Battery Metals allows us to secure essential materials for sustainable battery technology and strengthen our commitment to North America, where we are developing an extensive e-mobility ecosystem.”
Jörg Teichmann, Chief Procurement Officer at PowerCo, remarked, “This step reinforces PowerCo’s aim to be a leading global battery player with strong roots in Europe and North America. Establishing a North American supply chain for EV batteries with our partners enhances our regional presence and promotes the growth of a resilient, sustainable battery industry.”
Ken Brinsden, CEO & Managing Director of Patriot Battery Metals, stated, “The partnership with PowerCo and Volkswagen Group’s investment underscores the excellence of our team and the world-class potential of the Shaakichiuwaanaan Lithium Project. It positions us prominently in the burgeoning global EV supply chain.” The transaction awaits approval from the Toronto Stock Exchange (TSX). More details are available in Patriot Battery Metals’ press release on their website.