At a time when everything seems to be going wrong in the Legault government’s battery sector, Quebec welcomes without fanfare an investment of 70 million from the main German automobile manufacturer. This is the largest direct investment in its history in Quebec.
Posted at 5:04 p.m.
The subsidiary of the German automobile group Volkswagen responsible for its giga-battery factory in St. Thomas, Ontario, announced Wednesday an investment of nearly 70 million in the company that owns the important lithium deposit of Shaakichiuwaanaan, in the Bay -James.
PowerCo SE thus acquires 9.9% of the shares of Métaux de Batteries Patriot, at a unit price of $4.42, which represents a premium of 65% compared to the average share price over the last 30 days. of the company on the Toronto Stock Exchange.
In exchange, Patriot undertakes to supply on an annual basis and for 10 years at least 100,000 tonnes of spodumene, a concentrate of Li2O considered the most important lithium ore. It serves as a raw material for the production of lithium-ion batteries for electric vehicles. This supply of lithium represents approximately a quarter of the total production envisaged for the first production phase of the Shaakichiuwaanaan project, formerly called the Corvette project.
PHOTO ALAIN ROBERGE, THE PRESS
Pictured is a lithium core drill and lithium powder
The resulting lithium will mainly be sent to the battery production plant that PowerCo is building in St. Thomas, halfway between Toronto and Detroit. The ore could also be used to supply other Volkswagen factories in North America or even Europe.
The German group, the largest automobile manufacturer in the world with its Japanese rival Toyota, announced last winter an ambitious investment project of 200 billion US dollars in the electrification of its products. According to its forecasts, 70% of its vehicles sold each year in Europe and 50% of those sold in North America will be electric by 2030 at the latest.
“By collaborating with Patriot, we are not only securing essential raw materials for cutting-edge sustainable battery technology, but we are also strengthening our commitment to North America,” underlines Thomas Schmall, member of the technology council for Volkswagen, in a press release. .
“This allows us to realize our aspirations to cover important steps in the entire value chain, from raw materials to the operation of gigafactories,” added Head of Procurement for PowerCo, Jörg Teichmann.
Positive signal for Quebec
Patriot’s Shaakichiuwaanaan lithium mine project is ambitious. According to the first drillings, it would be the largest known deposit of lithium oxide in America, and the eighth of its kind in the world.
In this context, the arrival of Volkswagen in the picture should be interpreted as good news, even if the amount invested is not enormous, explains independent geologist and mining analyst Éric Lemieux. Indeed, “70 million is a good start,” he told The Press. “It’s a good signal. The project now needs to go into production, but Volkswagen is a company that has a reputation for being serious about its investments. »
Mr. Lemieux believes that Quebec could benefit from this announcement, which reminds us that the province has strategic mining resources whose exploitation could prove very lucrative, in the short and long term.
It creates jobs, it forms expertise that we can then export, we have already done it in the past [notamment dans l’exploitation du minerai de fer].
Independent geologist and mining analyst Éric Lemieux
This could be a way for the government to soften the risk of investing in other, more complex elements of the battery production chain, such as assembly plants. The setbacks of Northvolt and Lion Électrique illustrate this well, adds the Quebec expert.
“To demand the processing of ore in Quebec at all costs is risky. Rather than betting billions on factories, we could improve the infrastructure to access these minerals, which can also generate good spinoffs. If, in a few years, the market allows it, we will be able to build factories. »
Volkswagen management is well aware of this situation. The German company is the largest investor in Swedish company Northvolt, with a stake that stood at 21% in the battery maker’s most recent financial report.
-with Julien Arsenault, The Press
Who is Patriot Battery Metals?
A Vancouver company, Patriot has a market capitalization of 490 million. Its Shaakichiuwaanaan (Corvette) property in Quebec, located less than 50 kilometers from the LG4 complex, reveals exceptional lithium potential. The July 2023 initial resource estimate places the deposit first in the Americas and 8e world rank. With 109.2 million tonnes at 1.42% Li2O, Corvette represents 3.84 million tonnes of lithium carbonate equivalent. After the discovery of the deposit, the stock went up, from $0.30 on November 25, 2021 to nearly $18 in June 2023. Subsequently, the stock tumbled, driven by the 77% fall that knew the price of spodumene. Before Volkswagen’s investment was announced, Patriot’s stock was selling for $2.65. The stock gained 30%, or $0.81, in Wednesday’s session. –The Press
