PM Trudeau announces Umicore to build $1.5-billion electric vehicle battery materials factory in Ontario
Umicore officials alongside ISED’s Minister Champagne and Ontario’s Minister Fedeli listen on as Prime Minister Trudeau announces a $1.5 billion factory for cathode active material (CAM) and precursor cathode active material (pCAM) in the Kingston, Ont. area. Photo: Minister François-Philippe Champagne/Twitter

At full capacity, the global company’s plant just outside Kingston will produce enough cathode active material and precursor cathode active material to supply one million vehicles per year and bring hundreds of permanent jobs to the province

Belgium-based Umicore N.V. is building a $1.5-billion cathode active material (CAM) and precursor cathode active material (pCAM) plant in Ontario, just outside of Kingston after signing a memorandum of understanding with the Government of Canada.

The announcement was made today during a press conference at Queens University in Kingston with officials from Umicore appearing alongside Prime Minister Justin Trudeau, Innovation, Science and Industry minister François-Philippe Champagne and Ontario’s minister of Economic Development, Job creation and Trade, Vic Fedeli.

Ontario’s minister of Economic Development, Job creation and Trade, Vic Fedeli. Photo: LinkedIn

“I think the demand worldwide for everything we do from the critical minerals through the cathode through the parts of the battery and through the electric vehicles — there’s room for growth in every single one of those areas,” says Fedeli in an interview with Electric Autonomy Canada.

“This is historic — $16 billion in new investment — that doesn’t happen anywhere in Canada. It’s never happened in Ontario. One hundred thousand jobs are staying in Ontario. That’s what we did this for. This is business and it’s beautiful, as a business person.”

Umicore’s Loyalist Township plant, 20 minutes northwest of Kingston, will create 1,000 construction jobs and several hundred permanent positions when the plant becomes operational. At full capacity, the battery supply factory will produce enough CAM and pCAM for one million vehicles per year, Umicore says. That will equate to roughly 20 per cent of the North American EV market by 2030.

Innovation, Science and Industry minister François-Philippe Champagne. Photo: LinkedIn

Construction is slated to begin in 2023 and the facility will come online in 2025. It’s not clear at this stage what battery cell makers Umicore may be selling to from their Kingston-area factory, but they are “in negotiations with several potential customers for production contracts” according to the company’s press release.

“It’s no longer ‘why Canada?,’ but ‘how Canada,'” says Champagne in an interview with Electric Autonomy.

“You have access to talent, ecosystem, renewable energy, critical minerals and we’re linked to all the G7 countries through trade agreements. This announcement today will have an impact around the world where people really start to see what’s going on in Canada.”

“Umicore is the leading and also the only non-Asian precursor cathode active material maker in the world. The fact that they’ve chosen Canada for their North American operation is a huge vote of confidence.”

François-Philippe Champagne, Minister of Innovation, Science and Industry of Canada

Umicore’s trajectory

Umicore is not a household name in Canada, but it does already have a small presence here. The company is headquartered in Europe, but its Canadian subsidiary, Umicore Canada Inc., is located in Fort Saskatchewan, Alta., and Umicore Precious Metals is in Markham, Ont.

Umicore describes itself on its website as “a global materials technology and recycling group. We reduce harmful emissions, power the vehicles and technologies of the future, and give new life to used metals.” The company was formed from a merger of companies between the late ’80s and through the ’90s. The group was renamed Umicore in 2001.

For the majority of its existence the company has been deeply involved in minerals and mining, but in 2007 it had a clearly defined clean technologies mission “including the development of new automotive catalysts, next generation rechargeable battery materials, fuel cell catalysts and membranes, and recycling processes,” reads the company site. By 2022, it had further sharpened its focus on becoming a “circular material technology company.”

“Ontario has all it takes for Umicore to establish a full-fledged, sustainable supply chain for battery materials — all the way from the mine right to the end-market of electric vehicles. This expansion in North America would complete our global rollout of regional supply chains for our automotive and battery cell customers to now three continents,” said Mathias Miedreich, CEO of Umicore.

In May, Umicore appeared in the lobbyist register for the Ontario and federal governments, applying for grant funding to be “used to build a precursor and cathode active materials production plant including the purchase of equipment for its production activities.”

Umicore further disclosed in today’s press conference that the Loyalist Township factory will run only on 100 per cent renewable energy to build the battery CAM.

“The future is not only an electric cars, but it’s green cars,” says Champagne. “Canada will be the supplier of choice — the green supplier of choice for the auto sector in the world. We’re going to be the only jurisdiction with not only the critical minerals, but all the refining capacity and all the pieces to make a battery.”

An end-to-end supply chain

The demand for electric vehicles has grown and the momentum shift towards a transition to zero-emission mobility is solidifying against a backdrop of global trade instability. Canada is taking steps to create an end-to-end EV battery supply chain and pivot the automotive industry to manufacturing electric vehicles.

“Umicore’s decision to establish its new facility in Loyalist Township is another major step forward as we make Canada a global leader in producing electric vehicles — from minerals to manufacturing,” said Prime Minister Trudeau.

Since late 2020, Ontario has been the locale for a series of blockbuster investments by key industry players to build operations that feed into the North American battery and electric vehicle supply chain.

Stellantis, Ford, General Motors, LG Energy Solutions and Flex-N-Gate are among the marquee-name companies setting up EV manufacturing or battery manufacturing facilities in the province. Next door in Quebec, meanwhile, StromVolt, Britishvolt, BASF and General Motors have all made public commitments to battery manufacturing activities.

In particular, earlier this year GM and Posco committed to build a joint venture $500-million cathode active material factory in Quebec, but it will only supply GM’s North American Ultium battery factories and the plant’s full capacity output is not enough to meet North American CAM demand.

So, one of critical holes in Canada’s supply chain remained a shortage of CAM and pCAM materials — the refined mineral slurry that acts as the primary ingredient in battery cells. That hole is what the Umicore battery material factory will fill.

“This is really a critical piece to the whole battery ecosystem we’re building in Canada,” says Champagne. “One of the points I hope that people understood: Umicore is the leading and also the only non-Asian precursor cathode active material maker in the world. The fact that they’ve chosen Canada for their North American operation is a huge vote of confidence.”

The Umicore factory in Loyalist Township will combine production of the battery pCAM and CAM in one place. As well, cathodes account for half of battery values and the production process is made more efficient by locating the factory near to a supply of critical minerals.

2025 and beyond

Now that a complete provincial EV battery supply chain has been secured, it is a waiting game until 2025 when most of the new factories and projects will go online.

Despite the symbolic significance of the public announcements and the work that went into securing the deals, now a new phase of development — actually putting shovels into the ground and turning assembly lines on — must be taken on with equal vigour.

“We’ve made the approximately $16 billion worth of announcements that are now in various phases of construction,” says Fedeli. “A lot of these are companies from overseas need some eyes and ears on the ground to help them. They need somebody to ask the basic questions sometimes. That’s what our ministry does, it’s like a white glove concierge service.”

Fedeli says in addition to helping the existing battery supply chain companies coming in with their projects, it’s always important to keep reaching.

“Under NAFTA 2.0 the Rules of Origin mean that [parts manufacturers] need to go from 64.5 per cent made-in-North-America to 75 per cent and I think there’s only two years left to get there. We want to alert these companies worldwide that if you want to ship duty free into North America, you need to be located here. And, if you’re going to locate in North America, locate in Ontario,” says Fedeli.

“There’s room for more capital, there’s room for another battery plant, there’s always room for a sixth OEM. These are all long term plans, but we are very aggressive working with other battery manufacturers while this is the time that decisions are being made.”

It’s a sentiment echoed by Champagne who says he is keen to get at least one other battery plant set up in Canada and is anticipating that investments beget investments. So, in short from the minister: the industry can expect that there will be more players to come to the national supply chain.

“Firstly we needed to imagine the ecosystem. Then we needed to build it and we’ve done that. Now, we’re optimizing it,” says Champagne.

“The auto sector is spreading in different parts of Ontario and in different parts of Canada. We’re building probably the strongest battery ecosystem in the Western world. One CEO told me recently, ‘Canada is on a roll.’ So, I would say it’s going well.”