Ken Brinsden’s Patriot Battery Metals signs up car giant Volkswagen as partner for Canadian lithium mine

German auto giant Volkswagen will tip about $77 million into Ken Brinsden’s Patriot Battery Metals under a strategic partnership deal that delivers a shot in the arm of its flagship Canadian lithium project.

The agreement will hand the carmaker 9.9 per cent of Patriot, with the investment on $C69m priced at $C4.42 a share — a healthy premium to its 30- and 90-day volume weighted average.

The deal also includes a binding offtake component, with Volkswagen’s battery manufacturing business PowerCo to take 100,000 tonnes of spodumene concentrate a year over 10 years from Patriot’s Shaakichiuwaanaan lithium project in the famed James Bay region of Quebec on Canada’s east coast.

The tonnes account for about 25 per cent of Shaakichiuwaanaan’s stage one output, and 12.5 per cent once stage two is complete.

Patriot and PowerCo will also work together on a European and North American battery supply chain that can attract government support and incentives, and the potential development of a chemical conversion facility.

Patriot expects to outlay $1.37 billion for the mine to reach nameplate capacity. A feasibility study is under way and targeted for completion during the September quarter of next year. Volkswagen may tip in extra financing to support the project in return for additional tonnes.

Mr Brinsden said taking on Volkswagen and PowerCo as strategic partners marked a “pivotal milestone” for Patriot.

“This investment is consistent with our long-term strategy for Patriot to become a global lithium leader and a key supplier of lithium raw materials to the emerging North American and European battery materials supply chains,” he said.

“The initial investment by PowerCo and Volkswagen validates the world-class nature of the Shaakichiuwaanaan project and the offtake cements the company’s future as a major lithium raw materials supplier of choice in their EV supply chain.”

Volkswagen board member for technology Thomas Schmall said the deal continued the carmaker’s 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,” Mr Schmall said.

PowerCo’s chief procurement officer Jörg Teichmann said partnering with Patriot was another step for Volkswagen that positions it across the entire value chain.

“We are very pleased to have found such a partner in Patriot and to support the team in becoming one of the global lithium leaders and key supplier of lithium raw materials to the emerging North American and European battery materials supply chains,” Mr Teichmann said.