Why Umicore Hit the Pause Button on Loyalist Plant Construction

In Loyalist Township, construction of a multibillion-dollar electric vehicle (EV) battery plant by Umicore has been put on hold. This plant was intended to produce crucial parts for EV batteries, known as cathode active material (CAM) and precursor cathode active material (pCAM). The international circular materials technology company, Umicore, has decided to continue this pause as part of their cost-saving measures. Umicore's strategy involves maximizing the use of their existing plants before considering any new expansions. The company aims to retain a core team at their local office in Loyalist during this pause. They claim that this decision aligns with the needs of their customers and will serve their long-term supply agreement with AESC from their plant in Korea.Local officials confirmed that Umicore has not yet used the incentives offered by the Canadian and Ontario governments for this plant. However, these incentives will remain available if construction resumes, along with the initial employment commitments. Umicore's CEO, Bart Sap, acknowledged the challenges in the automotive industry's transition to electric mobility and the need for hard decisions to ensure the company's competitiveness. This pause is part of broader cost-saving measures by Umicore, which could impact around 260 jobs. The company also plans to resize its corporate functions and adjust its research and development activities for better efficiency and focus. Umicore intends to transfer certain R&D work to another site and discontinue some activities in Denmark. The company's half-year results for 2024 provide more details on these changes and can be found on their website.