Albemarle discontinues downstream partnership MOU with Patriot Battery Metals

Mutual agreement

Following Albemarle’s C$106M strategic investment into Patriot Battery Metals in July 2023, an MOU was signed which set up a 9-month exclusivity period, which could have been extended.

The MOU involved access to future mine production from Corvette project, which would integrate with a downstream chemical conversion facility.

This month, at the completion of the initial 9-month period, no deal or extension emerged as both parties agreed to discontinue the MOU.

Adamas take:

Although an ominous sign for Canada’s hard rock market darling, for Patriot Battery Metals, in the context of Albemarle’s current balance sheet and debt covenant stress, this was not entirely unexpected.

Albemarle has repeatedly stressed a tightening of capital expenditures is taking place in 2024, a significant pivot from mid-2023 when the company enthusiastically engaged in M&A (Kathleen Valley, Corvette).

As the company is currently in advanced construction stages of two conversion facilities (Meishan, Kemerton train 3), among other commitments totaling $1.6 – $1.8B in 2024, it appears there remains little appetite to introduce more complexity into the schedule, regardless of the strategic merits of an integrated Corvette – lithium hydroxide facility.

On the bright side, the termination of the MOU allows Patriot to explore broader partnership opportunities.

[Extract from the May issue of the EV Battery Lithium Monthly service.]

Image: Patriot Battery Metals Summer-Fall Drilling Program Site Visit

Chris Williams, Analyst at Adamas Intelligence

Chris is an Analyst at Adamas Intelligence focused on the global lithium industry. He researches and analyzes the lithium value chain to uncover actionable opportunities for clients.

Chris has 11-years experience in mining and oil & gas operations optimization, delivering value from data intensive insight generation. He completed his Bachelor and Masters of Engineering at the University of Queensland, majoring in Mechanical Engineering, and is currently completing a Masters of Business Administration at the University of British Columbia.