Volkswagen has snapped up a 9.9% stake in Patriot Battery Metals (ASX: PMT) for C$69 million to secure 100,000t of Li2O concentrate per annum from its giant 4.88Mt Shaakichiuwaanaan lithium development in Canada’s James Bay region
Through its battery-producing arm PowerCo, the automaker will snare a quarter of Patriot’s annual output of lithium oxide from the critical minerals developer run by ex-Pilbara Minerals (ASX: PLS) chief Ken Brinsden.
The scrip deal involves Volkswagen (ETR: VOW3) purchasing shares at C$4.42 per share, a sizeable 65% premium to the 30-day volume-weighted average price (VWAP).
Volkswagen’s downstream dream
Speaking with Reuters last year, Volkswagen CEO Thomas Schmall said the company would be accelerating efforts to become a global battery supplier, spending $34 billion - from raw production to electric vehicles.
"The bottleneck for raw materials is mining capacity - that's why we need to invest in mines directly," Schmall said.
The European automaker has been making deals left, right and centre. It is building a gigafactory with Belgian tech business Umicore and needs to shore up critical minerals such as lithium concentrate to feed into its battery manufacturing.
Last year, PowerCo inked an agreement to deliver cells to Ford for the 1.2 million vehicles the U.S. carmaker is building in Europe on Volkswagen's electric MEB platform.
Late last month it tapped up graphite player Novonix (ASX : NVX) to supply synthetic graphite material in a deal that will see a minimum of 32,000t of graphite supplied to PowerCo between 2027-2031.
The ex-China graphite industry has been in the doldrums lately, but may be making a comeback as The West stops perceived price gouging of the material to keep spot prices low.
Graphite and lithium are essential in creating lithium-ion batteries for EVs.
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