According to foreign media reports, on December 18, Volkswagen Group's battery division, PowerCo, signed a binding offtake agreement with Canada's Patriot Battery Metals and invested C$69 million (approximately $48 million) in the company to strengthen its supply chain. Patriot Battery Metals is a mining company developing a lithium mine project in northern Quebec.
This investment grants PowerCo a 9.9% stake in Patriot Battery Metals. The agreement also includes a supply contract under which Patriot Battery Metals commits to supplying PowerCo with 100,000 mt of lithium-rich spodumene concentrate over 10 years.
PowerCo's Chief Procurement Officer, Jörg Teichmann, stated that this investment represents the "next step" in establishing the company's position in the global battery sector. In a press release, Teichmann said: "By building a North American EV battery supply chain together with our partners, we are strengthening our presence in the region and advancing the development of a resilient and sustainable battery industry."
PowerCo is constructing its battery cell factories in Germany and Spain and is expected to begin building its third and largest factory next year in St. Thomas, Ontario, Canada. The company stated that the agreement with Patriot Battery Metals will provide raw materials for these three battery factories.
This lithium mine agreement marks PowerCo's second major offtake agreement disclosed within just a few months. On November 24, PowerCo announced that it had signed a binding supply agreement with synthetic graphite producer Novonix.
This agreement provides Vancouver-based Patriot Battery Metals with another supporter to advance its Shaakichiuwaanaan project in the Eeyou Istchee James Bay region of Quebec, Canada. Last year, the company received a $109 million investment from lithium producer Albemarle.
Based on drilling results, the Shaakichiuwaanaan deposit is the largest spodumene resource in the Americas and one of the largest globally. The deposit is located in a sparsely populated area approximately 550 kilometers north of Montreal but is close to essential infrastructure, including an all-season accessible road and high-voltage power facilities connected to the nearby La Grande-4 hydropower dam.
However, according to the company's latest roadmap, lithium production is still at least five years away. Patriot Battery Metals is expected to submit the necessary environmental approvals next year while aiming to secure financing by 2027. Production at the deposit could begin in 2029, while the agreement with PowerCo requires the deposit to be operational by June 2031.
The two companies have also left room in the agreement for further collaboration. Patriot Battery Metals stated that once it releases the feasibility study report for its lithium project, the two parties will continue discussions on additional project financing and potential lithium processing plant cooperation.
