Umicore Delays Ontario Battery Materials Plant and Implements Workforce Adjustments

Strategic Review Delays Ontario Plant Construction
Belgium-based Umicore has decided to delay the construction of its planned battery materials facility in Loyalist, Ontario, as part of a broader strategic review under new CEO Bart Sap. Originally designed to focus on mined materials, the project may later incorporate recycling capabilities. The delay comes as the company opts to optimize existing production capacity instead of expanding into new plants.

Focusing on Existing Capacity and Global Supply Chains
Umicore is prioritizing the use of its current facilities to meet existing demand. Its long-term supply agreement with AESC for high-nickel cathode active materials (CAM) for the North American market will now be fulfilled through Umicore’s plant in Cheonan, South Korea, rather than from the delayed Loyalist site. This shift underscores Umicore’s focus on maximizing output from existing operations before pursuing additional expansion.

Government Incentives and Future Plant Plans
Despite the delay, Umicore has not yet drawn on government incentives from Canada and Ontario for the Loyalist facility. The company reassured stakeholders that, should construction resume, it will still have access to these incentives, including employment commitments. The Loyalist office will remain operational to maintain a core team, ensuring the company is ready to move forward when appropriate.

Workforce Reductions and Efficiency Measures
As part of its strategic shift, Umicore is reducing its workforce by approximately 260 employees, primarily at its plant in Jiangmen, China, and in corporate functions. The company is also streamlining its research and development (R&D) efforts, including consolidating its heavy-duty diesel R&D activities from Denmark to Germany to improve efficiency and customer focus. These moves are expected to yield savings of around 40 million euros ($43 million) by 2025.

Adapting to the Evolving Battery Materials Market
The decision to delay the Loyalist project and implement workforce reductions reflects the company’s response to the changing dynamics of the electric vehicle (EV) and battery materials sectors. While EV sales in North America are on the rise, Umicore remains cautious about the future of battery materials mining and processing in the region. As the automotive industry transitions to electric mobility, Umicore is focusing on optimizing its assets, particularly in South Korea, to remain competitive in this evolving market.