Umicore postpones Canadian battery materials project

Belgium-based metals producer and recycler Umicore says it has “decided to continue to pause” construction of its planned battery materials facility in Loyalist, Ontario, Canada.

Under its new CEO Bart Sap, Umicore has been undertaking a what it calls a strategic review of its Battery Materials business unit, including the project in Canada. Although the Ontario project was conceived to focus on mined materials, a Umicore spokesperson indicated to Recycling Today in 2022 that the addition of recycling capacity was an option.

“A key part of Umicore’s ongoing strategic review of its Battery Materials business is to maximize capacity utilization of existing plants prior to any further expansion,” states the company now. Umicore says its office in Loyalist will remain open so it can “retain a solid core team on site.”

The Belgian firm says its decision was made by matching existing demand and offtake agreements for cathode active materials (CAM) with its current capacity.

“The long-term supply agreement with [Japan-based battery producer] AESC for high-nickel CAM for the North American market will be served from Umicore’s plant in Cheonan, South Korea,” says Umicore.

Umicore says it has not “drawn on the incentives from the governments of Canada and Ontario for the Loyalist plant [and] in the event of restarting construction, Umicore will continue to have access to those incentives under the same conditions, including employment commitments.”

Along with its delay in Canada, Umicore says other actions taken based on its review process include one to reduce its companywide workforce by about 260 people.

Those moves will take place “predominantly in [a] production plant in Jiangmen, China,” and within what Umicore calls “group corporate functions.”

In the second category of job cuts, about 100 of those positions are focused on its home country of Belgium. There, Umicore says it “has begun consultations with trade unions and works councils representatives.”

States Umicore, “The company will also adjust the setup of its research and development (R&D) activities for greater efficiency and customer focus and prioritize R&D projects which align best with its core competencies and strengths.”

The company says it plans to consolidate R&D efforts in its Automotive Catalysts business unit by transferring heavy-duty diesel R&D work from its current site in Hørsholm, Denmark, to its Hanau, Germany, location.

“Umicore is navigating a challenging environment where we feel the impact of the complex transitioning of the automotive industry toward electric mobility,” says Sap.

Part of that environment may involve the uncertain future of battery materials mining and processing in North America. Although the Kelley Blue Book organization says EV sales in the United States grew by 11 percent year over year in the third quarter of 2024, the question of what volume of EV battery minerals will be extracted in North America remains an open one.

In the meantime, “Serving our North American customers out of Korea is now clearly the most effective use of our assets,” says Sap.

Continues the CEO, “To ensure our company’s long-term competitiveness, we need to make difficult decisions. We commit to support[ing] our teams throughout these changes. While these decisions were not made lightly, they set us on the right path for us to be better positioned to seize future opportunities.”

The company calculates the latest cost saving measures announced combined with an “efficiency program” initiated last year are expected to generate approximately 40 million euros ($43 million) of savings in 2025. Additional details about the new actions will be discussed at the Umicore Capital Markets Day next January, says the firm.

Umicore describes itself as a circular materials technology group with four business groups: Battery Materials, Catalysis, Recycling and Specialty Materials.