Canadian governments have committed nearly a billion Canadian dollars to Belgium's Umicore for the construction of a battery supply-chain plant in Eastern Ontario. Umicore had previously announced its plans to establish a factory in Canada to produce cathodes for electric vehicle (EV) batteries. Cathodes are a crucial component, accounting for approximately 50% of an EV battery's value and containing essential minerals like nickel, cobalt, manganese, and lithium. The proposed plant will be situated approximately 135 miles east of Toronto.
The financial support from Canada and Ontario was disclosed on Monday, with Canada pledging a total of 551.3 million Canadian dollars ($400 million) and Ontario offering C$424 million. According to Canada's statement, Umicore intends to invest over C$2 billion in the construction of the plant initially.
This announcement follows previous subsidies provided by the Canadian and Ontario governments to Volkswagen and Stellantis, totaling around C$28 billion, to secure agreements for the establishment of EV battery manufacturing plants. However, the Canadian parliament's budget watchdog has projected that it will take 20 years, until 2043, for these investments to generate a break-even outcome.
The Canadian funding is partly a response to the Inflation Reduction Act in the United States, which has allocated $1 trillion in federal tax incentives and loans to foster the growth of domestic supply chains within the green-energy sector.
