Volkswagen is taking advantage of the lithium market crisis
The company from Wolfsburg bought 9.9 percent. shares in Canadian Patriot Battery Metals. This is the first investment Volkswagen into a mining company. Under the agreement, the Canadian company will supply the European car manufacturer with 100,000 metric tons lithium material within 10 years. This represents a quarter of production from the first phase of the Patriot Battery Metals project, the mining company said. The raw material will be delivered to battery production plants Volkswagen w North America and Europethe Canadian mining company said.
Volkswagen plans to develop the electric car segment
The investment shows that Volkswagendespite the constantly growing competition from Chinese producersplans to further develop production electric cars. Admittedly, sales electric vehicles in Europe increased by 6.9%. in October, but is still lower than last year because of liquidation surcharges for their purchases. Lower sales forced Volkswagen to introduce savingsincluding making unprecedented decisions closure of plants in Germany.
The stagnation in the EV market backfired on lithium producers
Lithium producers have been hit hard slowdown in the EV marketand raw material stocks are immediately available all over the world. Mining companies have therefore scaled back their mine expansion plans and reduced production due to lower prices.
Consolidation of lithium producers
However, Volkswagen’s investment is another in a series of acquisitions in the lithium market, including proposals Rio Tinto Group valued at $6.7 billion regarding the acquisition Arcadium Lithium from October.
Patriot Battery Metalsa Canadian-based company, intends to build a large lithium mine in northern Quebec, 692 miles from Montreal. Last year, the company sold 4.9 percent. shares Albertmarle Corp.the largest lithium producer in the world.
