Patriot Battery Metals ‘getting on with it’ amid lithium bust as Canadian junior scores deal with Volkswagen

Lithium talisman Ken Brinsden says it’s not a matter of if, but when the battery market rebounds, as his Canadian venture inks a $77 million investment from German auto giant Volkswagen. The Patriot Battery Metals chief executive has been resolute in his stance that the Western world is underestimating China’s dominance in lithium processing, and can’t afford to wait around. “China invests all the way through the cycle,” he told The West Australian. “And at some point in time, they’re going to step back into the market and need more lithium raw material, and that’s what’s going to motivate the next price response. So to me, it’s just a question of when, not, if.” Volkwagen’s $77m investment into Patriot announced on Wednesday, which will hand the carmaker 9.9 per cent of the Canadian junior, is a manifestation of industry ‘getting on with development’ despite market sceptics, according to the executive. “As much as lithium markets are saying, ‘Hang on, there’s hiccups or bumps in the road’ what industry is doing is getting on with continued development, especially where it supports alternatives to the China supply chain.” Mr Brinsden is well-acquainted with lithium’s volatility, having spearheaded success story Pilbara Minerals from the commodity’s bust in 2016 to 2022 as prices catapulted to over $US6000 a tonne. He is bullish on lithium’s return, and believes there are similarities between where the market is at now and the last downturn, but thinks it’s unlikely prices will climb back to the euphoria of 2022. “I think as markets mature, you would naturally see a diminishing range in respect of that volatility. I think that the extremes we’ve seen historically probably represent the out of bounds,” he said. Patriot believes the project hosts the world’s eighth-largest hard rock lithium resource. Volkwagen’s $C69m investment into the company is priced at $C4.42 a share — a healthy premium to Patriot’s 30 and 90-day volume weighted average, and will make it the company’s largest shareholder. 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. Patriot had been on the hunt for a new partner after an arrangement with US lithium major and its biggest investor Albemarle fell through in May. 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 in a statement. “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.