You're listening to The Whole Truth, a Resources Rising Stars podcast. Welcome back to The Whole Truth podcast. I'm Paul Armstrong, thanks for joining us. We return to the lithium industry this week with a great chat with Ken Brinsden, well known to you through his times going right back to Atlas Iron, of course. He was one of the key drivers behind Pilbara Minerals as it grew into a major company, and now he's the chief executive of Patriot Battery Metals, which owns a huge lithium deposit in Canada and is on a fast track to project development. Kenny is at the cold face of the lithium industry, if you excuse me mixing my metallurgical metaphors there. He has great insights into a very opaque industry, and hence his commentary at conferences and other places is always so well appreciated by investors who are trying to get a handle on what the hell is happening in the lithium game. It's no secret that Patriot's share price, like everybody in the lithium space, has been sold off for some time. The question is, is there now a golden counter-cyclical investment opportunity as the world gets new technology, the Trump geopolitical ding-dong plays out, and the world looks for non-Chinese sources of lithium and lithium chemicals to make into batteries? Ken gives us some great insights into what he sees as he travels around the world talking to suppliers and buyers in this industry. He knows the game inside out, and he also talks about some of the latest technological developments and why he has made a decision on his own energy supplies at home and where he landed on his assessment of the pros and cons of solar panels and batteries. You'll really get a lot out of this, it's very interesting, and Ken's a great speaker.
Ken, it's been a very big week in the lithium industry, although the news from BYD has been somewhat lost against backgrounds of federal government budgets and the usual geopolitical turmoil and the like. But of course, this week BYD announced that it can now recharge an EV in five minutes, a major breakthrough in the technology. What does that mean for the lithium outlook and for Patriot?
Oh, isn't it incredible how quickly the industry is moving? This is just one more example of how quickly the new energy industry as a whole, but also the lithium subset of the industry, is moving. And it won't surprise you, I guess, that it's all about China, at least in the short term. So yeah, BYD's announced the ability to, you know, incredibly quick charge and recharge in an EV.
I mean, in essence, from my reading of it, Ken, it says that essentially, this is my words not theirs, of course, that you can now recharge an EV in the same time basically as it takes you to fill up your petrol tank. Yep, that's a game changer, isn't it?
It is, yeah. The average consumer has always been a little bit fearful of what they don't know, and the two things that get talked about a lot in the adoption of an EV is the range and the period of time it takes to recharge.
So how is the technology changing?
Well, again, this is just one more example. BYD is a bit of a breakthrough, the speed with which you can charge the battery. Clearly that's one of the barriers to entry for EVs, but you could argue the technology is going to bust through that in no time. And on the question of range, well, arguably similar dynamics are unfolding. I want to point out another really important technology change is the way we hybridize vehicles. So the historical norm, you all think about the Toyota Prius, you have fundamentally a petrol car that collects a bit of energy in a battery, a small battery, and then inserts it, reinserts it back inside a petrol car. Well, it's fair to say the next evolution of hybridization is to completely reverse that. You have an EV with a small amount of petrol for generation of energy to recharge the battery while you're driving. It's basically the complete reverse of the classic hybridization model, and it's happening because of China and the speed with which they're lowering the cost of the cells.
So what you're saying, Ken, in essence, is that the petrol motor now is just backup to the electric motor, not the other way around?
Exactly, exactly. And it turns out this is going to be cheaper than historical applications of hybrid technology. And I think it's a really big breakthrough for people worried about adopting their first EV. I'm not sure everyone should fear that question of range, I don't think it's actually that big a deal, but for those that do, there's this concept of range extension of an EV using a small petrol motor.
Now we can't talk about Patriot and the lithium market without it being tied into the whole geopolitical turmoil and the trade wars and tariff wars and all those lovely clichés that we're bombarded with every five minutes these days, Ken. But essentially, you look at this ding-dong that's going on between Canada, where of course your project is, and Trump, and it's getting pretty ugly between neighbours there. But is that actually, in a twisted sort of way, good news for Patriot? Is it sort of saying, hey, this is going to heat up here and Canada's got the lithium that the US will need if Trump is successful in revitalizing the US auto manufacturing industry? Presumably a big element of that is going to be EVs. You can't, I don't think anyone, even Donald, would suggest that you can rebuild Detroit on the back of six-litre V8s anymore. So the idea that they're going to need more lithium, they don't have a lot of lithium, do they? And Canada, like Patriot, has a lot of lithium. Is this going to open the door here in some shape or form?
Yeah, my poor Canadian mates, their heads are spinning with how quickly the relationship has changed. But I have no doubt, absolutely no doubt, that Canada is part of the US solution to the lithium-ion supply chain. There's incredible endowment in Canada, and especially Quebec, and our project being one of the more important ones, in which case it's highly likely that we're part of the solution.
Well, he wouldn't be, presumably Donald wouldn't be saying that Canada should be the 51st state of the United States if Canada didn't have something they want.
Oh, definitely. There's a prize there, and part of it is going to be the critical minerals sphere and lithium. Yeah, I have no doubt that Canada is going to be part of this solution. And in fact, you could argue that Trump is just looking a gift horse in the mouth there. He should be a bit more careful about it.
Or he knows he really hasn't got a lot to work with here. Canada's got these metals, particularly lithium, that the US is going to need, and therefore he's trying to negotiate the best deal rather than sit back and get done over.
Sure, sure. Yeah, definitely more to play out here. But if you want a new supply chain in North America to support the future of the car industry there, you definitely need Quebec and Canada as part of the solution.
It feels like that's a very, very natural way for the whole industry to evolve. But in Patriot's case, you haven't, you certainly haven't got all your eggs in the Trump or US basket, have you? Because you've got the arrangement with Volkswagen.
Yeah, yeah. So we see ourselves, and I think Quebec should as a whole see ourselves as both part of North America's solution, but equally part of Europe's solution. Quebec is really well placed for product to flow through to Europe, and of course there's close relationships there too. So I reckon Canada should double down on those relationships. They're key to our future. We definitely see ourselves as part of North America's solution, but equally part of Europe's solution. They have no natural competitive advantage in lithium raw materials, nothing like what Quebec and our James Bay project offers. So yeah, we would say we're part of the solution.
Now the US and Europe has really only got two choices here. They continue to buy Chinese battery chemicals and the like, or they source it from Australia, Canada. So when you look at it in that context, it does put the Australian and Canadian producers in a box seat. Ultimately, the trade war, if it plays out the way it looks like, and the world is going to get divided down the middle, then Canada and Australia is going to be perfectly positioned to substitute at some point the Chinese supply.
Yeah, so the key is matching what are the world's best resources typically. I definitely put ours in that category, and some of those in Western Australia are the premier resources globally. The missing link is the chemicals piece. Now, it's been a hard road to hoe, no two ways about it. Those chemical plants have been hard to build, but there's plenty more innovation to come in the industry. And I would suggest that those chemical facilities, if they do get constructed in the West, there's already some successful examples, POSCO in Korea being a notable one that Pilbara is involved in.
So the Koreans having success with that?
Yeah, I believe so. Yeah, no, I think that's...
Are they closing the gap on China? Let's face it, this is the key question here, isn't it? There is a great opportunity. The world does look like it's going to be divided down the middle in this respect, or many respects. But if you're going to say, hey, there's a trade war coming here, we need to get alternative suppliers to China, the problem is at the moment there is no real alternative supply in battery chemicals, is there?
No. So you can only do one of two things. You invest in your own supply chain, and that might yet be a very sensible solution, or you in fact invite the Chinese to come and invest locally in the supply chain. Now, if I was Trump, I'd be thinking that's actually a pretty pragmatic solution. I could sell that as, you know, yes, the Chinese investing in the US or even in Canada, but at least there are US and Canadian jobs. You know, that might be a very pragmatic solution. But if you're not going to do that, then your only other alternative is to invest in the supply chain yourself. Now, there are examples where it's working, POSCO being a notable one, and I'd suggest that there's going to be more over time. There's also more innovation to come in the supply chain too, and we feel we've got an important part to play in all that with our project. If you're going to build a new project in the hard rock category, why simply follow the China model, shipping spodumene concentrate, you know, to North Asia? Why not look at alternatives that simplify the supply chain, localize the supply chain? I'd be pretty confident in saying solutions like that are going to emerge in the period of time that we're developing our project.
That model that you just floated, Ken, about inviting the Chinese into the United States and to build the plants there, that's essentially what they've been doing for many years, isn't it? I mean, they've got Tesla operating there, they've had any number of foreign companies, you know, the Japanese companies building cars and other things in China. So they've adopted that model: come and invest in here, build it here, bring your technology and your know-how here, but do it in our backyard. And you're saying time to turn this around and say to the Chinese, bring your know-how to us.
I think it's a pragmatic solution for the future of our industry. If we genuinely want to decarbonize the global economy, we might as well take advantage of the smarts that have been developed in China, and in the end they'd be part of our solution. And I'd also make the point that actually the Chinese themselves would welcome that opportunity. They are looking for opportunities to participate in the next big markets, and clearly North America and Europe are absolutely the next big markets beyond China themselves. So would they happily invest? I think the answer is yes, they would. They'd do it tomorrow if the door was open.
So how close is Patriot to be able to become a player in this? You just announced some great exploration results this week. You know, the size of this deposit has never been the issue. It's really a case of how fast you can progress this, isn't it?
Yeah, so the team is working about as hard and as fast as you practically can. They've done an amazing job actually in the last twelve months. The progress of our feasibility study, which is coming out in the September quarter, and the ESIA in support of our mine authorization, they are all now very, very mature and they'll be presented during the course of this year. That's a pretty incredible milestone when you consider that the discovery was only made in November 2021. So here we are, what is it, roughly four years later, and we'll be set for mine authorization. So yeah, Chibougamau is a good place to work. The team is working really hard. We've raised money in support of the continued development of the project. We think we've got the right partners like VW and POSCO to help support our development initiative. All those things put us in the box seat for near-term production.
