Volkswagen buys stake in Canadian lithium supplier Patriot

Volkswagen Group has purchased a 9.9% stake in Canadian lithium exploration company Patriot Battery Metals, which it says is a "significant milestone" in the manufacturer's journey to becoming fully electric.

The C$69m (£38m) investment valued the stock at C$4.42 a share, a 65% premium to its 30-day average.

Under the terms of the deal, Patriot has signed an offtake commitment with Volkswagen's wholly owned batter manufacturer PowerCo to supply 100,000 tonnes of spodumene concentrate each year over the next 10 years.

PowerCo and Patriot have also signed an agreement to jointly explore and collaborate on shared strategic objectives, such as the future development of the latter's Shaakichiuwaanaan Project in Québec.

In a statement on Wednesday, Vancouver-based Patriot said the deal positions it to become a "key future supplier of lithium raw materials for the North American and European battery supply chains".

"This investment represents a significant milestone in our journey toward a fully electric future," said Thomas Schmall, VW's board member for technology.

"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. Together with partners, we are building a dedicated e-mobility ecosystem in North America, ranging from battery technology to software and specific vehicle architectures.”

VW shares were up 0.7% at €89.70 by 1039 in Frankfurt.