Volkswagen Group will spend $69 million on a 9.9 percent stake in lithium miner Patriot Battery Metals Inc. to secure raw materials for electric vehicles. The investment marks the European carmaker’s first investment in the mining industry. [emphasis, links added]
It includes an agreement that will supply Volkswagen with 100,000 metric tons of lithium material over 10 years, representing a quarter of production from the first phase of Patriot Battery Metals’ project in Canada, according to the mining company.
The material will supply Volkswagen’s battery plants in North America and Europe, Patriot Battery Metals said.
The investment shows Volkswagen is pushing ahead with electric vehicles even as sales stumble.
EV sales rose 6.9 percent in Europe in October but remained down for the year after policymakers reduced support for purchases.
Volkswagen meanwhile has pushed for savings measures including unprecedented plant closures in Germany amid growth struggles.
Lithium producers have been hit hard by the slowing EV market, with inventories of the raw material piling up around the world. Miners have slowed expansion plans and curtailed projects on weaker prices.
Volkswagen’s investment, however, is the latest in a recent string of lithium deals, including Rio Tinto Group’s $6.7 billion proposal to acquire Arcadium Lithium Plc in October.
Patriot Battery Metals, a Canadian-headquartered company, is seeking to build a large lithium mine in Quebec’s north, 692 miles from Montreal. Last year, the company sold a 4.9 percent stake to Albermarle Corp., the world’s largest lithium producer.
Read more at Financial Post
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