Belgian metals recycler and battery materials producer Umicore will halt construction of a battery materials plant in Loyalist, Canada. The decision comes amid a business review launched in July, during which the company also decided to postpone “large-scale” investments in an undisclosed battery recycling plant in Europe.
“Umicore is navigating a challenging environment where we feel the impact of the complex transitioning of the automotive industry towards electric mobility. Serving our North American customers out of Korea is now clearly the most effective use of our assets,” CEO Bart Sap said in a statement.
Analysts at Jefferies welcomed the move, noting it rationalizes plans to improve returns on capital for Umicore’s loss-making battery materials business. Following the announcement, Umicore shares rose 1.5%, recovering from an initial 2% drop at market open.
The company, which also manufactures catalytic converters and supplies battery materials to automakers, confirmed it has not drawn on incentives offered by the Canadian government. Umicore indicated that if construction resumes, it would access these incentives under the same conditions, including employment commitments.
Umicore also detailed cost-cutting measures announced in July, aiming for €40 million euros ($42.94 million) in savings by 2025. These measures will affect approximately 260 positions globally, including 100 in Belgium, out of 12,000 employees.
Consultations with trade unions have begun. The company plans to resize the workforce in its battery materials division, primarily at its Jiangmen production plant in China, and reduce R&D activities in Hørsholm, Denmark.
Source: Umicore, Battery Industry
