How Volkswagen Will Form a Sustainable Lithium Supply Chain
Volkswagen Group's battery company, PowerCo, and Patriot Battery Metals have entered into a strategic partnership. This is the first investment for PowerCo and Volkswagen in the lithium supply chain, underlining PowerCo's ambition to execute on its vertical integration strategy – from mine to battery.
The partnership ensures the long-term supply of lithium raw materials through a binding off-take commitment.
Strategic opportunities
The companies will jointly explore further strategic opportunities such as a downstream lithium supply chain with a focus on cost competitiveness, high ESG standards and long-term security.
An investment from The Volkswagen Group of US$48m to acquire 9.9% of Patriot's issued and outstanding common shares. The binding off-take commitment covers the supply of 100,000 tonnes of spodumene concentrate per year over 10 years once the Shaakichiuwaanaan Project starts production.
Thomas Schmall, Volkswagen Group Board Member for Technology, says: "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."
"Together with partners, we are building a dedicated e-mobility ecosystem in North America, ranging from battery technology to software and specific vehicle architectures."
The next step in PowerCo's mission
The lithium-bearing mineral is vital for the production of battery-grade lithium chemicals. This represents a key milestone with ramping up PowerCo's cell-production activities in Europe and North America, including its gigafactory in St. Thomas, Canada. The facility will be PowerCo's largest battery-cell factory with a capacity of up to 90 GWh.
Jörg Teichmann, Chief Procurement Officer of PowerCo, says: "This is the next step in PowerCo's mission to become a global battery player with roots in Europe and North America."
"By building a North American supply chain for EV batteries together with partners, we are strengthening our footprint in the region and driving forward the development of a resilient, sustainable battery industry."
"We are very pleased to have found such a partner in Patriot Battery Metals 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 EV ecosystem."
It will also provide ongoing support for Patriot's Shaakichiuwaanaan Lithium Project – which is moving forward rapidly, with it currently ranking as one of the largest lithium pegmatite resources in the Americas, and the 8th largest lithium pegmatite resource in the world. The high-grade deposit has the potential to provide long-term security to PowerCo's battery-cell factories.
Establish industry best practice for ESG standards
It will also see PowerCo and Patriot working together to establish industry best practice for ESG standards across all of their joint activities.
This includes, for example, waste disposal measures, water management, First Nation community engagement and implementing actions to meet PowerCo's and Patriot's carbon emission targets.
On the basis of a non-binding, non-exclusive Memorandum of Understanding, both companies will additionally explore collaboration opportunities to establish a sustainable, cost-competitive and ESG-compliant battery-grade lithium chemicals supply chain model.
Ken Brinsden, CEO and Managing Director of Patriot Battery Metals, adds: "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 emphasises 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."
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