Ontario Construction News Staff Writer
Global materials firm Umicore has stropped construction on its $2.76 billion battery materials plant project in Eastern Ontario, citing revised forecasts for growth in the electric vehicle (EV) sector, that are impacting the project’s financial viability.
The company broke ground on the site last summer and this week announced it will conduct a strategic review of its battery materials division to “better align with shifting market conditions”. A significant decline in customer demand projections for battery materials, alongside delays in contract ramp-ups are driving the decision.
Originally, the new site being built in the community of Loyalist was expected to achieve an annual production capacity of cathode materials for around one million electric vehicles by the end of the decade. This was to be supported by generous state subsidies. Canada’s national broadcaster CBC reported that the federal government wanted to contribute up to 551 million dollars and the province up to 425 million dollars.
Umicore specifically states that the demand forecast for its battery materials “has fallen sharply recently and that existing production capacities should now be utilised before investing in new ones.
The Belgian company says the review will include discussing “openness to partnerships across Umicore’s Battery Materials value chain”.
As of Friday, no provincial funding has been disbursed, although the Ontario government had initially planned to contribute up to $424.6 million.
Umicore officials say they will provide an update on the future direction of its battery materials business during its capital markets day presentation in the first quarter of 2025. The review aims to optimize the value of its operations in response to the evolving landscape of the battery materials market.