Mercedes and Volkswagen look to secure access to Canada’s supply of battery minerals

Canada’s battery minerals sector has been awarded a boost as two German automakers make promising agreements.  

Mercedes and Volkswagen (VW) have both agreed on a Memorandum of Understanding (MoU) with the Canadian government and are engaged in further talks to gain priority access to the Canadian supply of battery minerals 

Government officials welcome the use of Canadian battery minerals 

The twin MoU, which was signed in Toronto on August 23, has secured Volkswagen’s newly created battery company, PowerCo, as an important force in the market and indicates an unprecedented level of interest in Canadian activities from Mercedes.  

The news was revealed as part of a three-day trip from Mercedes and VW executives to Canada. The executives were joined by government officials from both Germany and Canada, including Canadian prime minister Justin Trudeau.  

Speaking at the event, Trudeau said: “I’m extremely excited about all the expertise Canada can bring to bear on the clean energy transition.” 

The industry has been quick to react to the news and has been referred to as a fourth-dimensional chess move” by the president of the Automotive Parts Manufacturers’ Association, Flavio Volpe. The agreement means Mercedes and VW will have a direct line to Canada’s supply of battery minerals, making it easier to achieve their corporate targets.  

This announcement differs from previous EV battery supply chain announcements, as it was delivered by federal government representatives. This is only because it pertains to critical battery minerals.  

“This is the first agreement that we’ve seen [in Canada] between states and foreign-owned companies on preferable access to raw materials,” added Volpe. 

It is apparent that all parties are keen for the partnership to grow. “I think that our German friends have realised, though, the real possibilities that we can offer to be the green supplier of choice. I think what this visit has done is to open up a world of possibilities,” said minister of Innovation, Science and Economic Development, François-Philippe Champagne. 

Jonathan Wilkinson, minister for Natural Resources Canada, highlighted the importance of a value-added supply chain for battery minerals. He said: “This isn’t just about digging up minerals, it’s about actually having the processing located here in Canada. We’re interested in the potential for them to think about investing.” 

More deals could be on the way

In addition to the MoU signed on August 23, Mercedes have released a statement outlining its intent to sign a further MoU with Vancouver-based Rock Tech Lithium. It is hoped this deal will supply Mercedes with 10,000 tonnes of Canadian battery minerals. 

VW also declared their intention to further exploit Canada’s rich supply of battery minerals, stating in a press release that “both parties see significant prospects for Volkswagen and PowerCo to ramp up cathode material production together with partners and to offer Canadian suppliers an opportunity to act as raw material suppliers, refiners, and processors. 

Canadian government officials appear optimistic that the new deal may pave the way for further German companies to consider taking advantage of Canada’s supply of battery minerals.  

“I think other German manufacturers are contemplating what Canada can be in terms of the green supplier,” said Minister Champagne. 

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