How two battery materials plants lay the foundation of Canada’s EV battery industry

Major investments in Canada by General Motors and the Germany-based chemical giant BASF will lay the foundation of the country’s electric-vehicle (EV) supply chain and spur further spending on battery mineral mining and processing, Canada’s industry minister and other experts say.

François-Philippe Champagne, federal minister of innovation, science and industry, called GM’s plan to build a $500-million cathode active materials (CAM) plant in Bécancour, Que., with partner Posco Chemical a “home run” for the province.

The automaker’s March 7 announcement came on the heels of BASF’s unrelated decision March 4 to build a similar battery-material complex in the same Quebec city. BASF did not disclose the value of the project.

The back-to-back investments in Bécancour — on the south shore of the St. Lawrence River across from Trois-Rivières — follow months of work by governments of Canada, Quebec and Ontario to attract battery-supply chain investors as the transition to EVs accelerates and automakers look to reduce their reliance on battery materials from Asia.

At a March 7 news conference, Champagne said that the two Canadian investments were just the beginning.

“I can assure you that there’s more to come,” he said. “We have been clear from the get-go that we want to see from the mine to the recycling plant and everything in between.”

He was proven correct on March 23 when Stellantis and LG Energy Solutions announced their joint venture would build a $5.2-billion EV battery plant in Windsor, Ont.

‘BEING BUILT BACKWARD’

The cathode active materials plants “bode well” for both Quebec and Ontario, said Trent Mell, CEO of Electra Battery Materials Corp., which is building battery material processing capacity in northern Ontario.

“The supply chain is being built backward,” Mell said. With early battery-plant decisions being made throughout 2021, he said, automakers and battery companies are moving upstream to CAM and will soon get to earlier material processing steps and to mining.

Because of Canada’s mining history and its well-established regulatory framework for issues such as tailings, water and effluent, Mell said, the country is better positioned for material refining and mining than other locations in North America.

“I really think Quebec and Ontario are going to emerge as distinct suppliers in the EV supply chain,” he said.

GM picked Quebec for its CAM plant in part because of the materials it expects to source from local producers, said David Paterson, GM Canada’s vice-president for corporate and environmental affairs. He would not share details of how much progress the company has made on lining up suppliers for the plant but he expects that room exists for both mining and value-added processing in Canada.

Local sourcing fits directly into the automaker’s wider EV strategy.

“GM has a desire to try and localize the supply chain for our Ultium battery system in North America and to do it in a sustainable way,” Paterson said, adding that the Quebec investment is a “very significant first step.”

ROOM FOR EXPANSION

Other notable benefits that GM saw in Bécancour include predictable environmental standards; strong infrastructure links through rail, road and a deep waterport; and Quebec’s low-cost, hydro-powered electricity grid. The site, Paterson said, was originally slated for a steelmaking operation that never materialized. The large plot of land is expected to give GM ample room for expansion beyond the plant’s original capacity.

Federal and provincial funding is in the works but has not been finalized.

BASF also cited the city’s logistical credentials and “competitive” clean power for its site selection. The company said the location would allow it to produce up to 100 kilotonnes of CAM per year as well as establish an integrated operation for producing what’s referred to as a precursor, which is a key ingredient in CAM.

CAM itself is one of the vital inputs for lithium-ion batteries. In GM battery cells, for instance, the mix of nickel, lithium and other minerals represents about 40 per cent of the total cost.

For GM, these components will come together at its four Ultium battery cell plants in the United States, all currently in various stages of development or planning. Once bundled into finished cells, the CAM produced in Bécancour will power the automaker’s next-generation EVs, such as its Chevrolet Silverado, GMC Hummer and Cadillac Lyriq.

Both GM and BASF plan to begin producing CAM in Bécancour in 2025.

Canadian governments, meantime, are continuing work to attract other battery-supply-chain or cell-plant investments.

“The next piece of the puzzle is to get a battery manufacturing plant. Those are very live discussions,” Champagne said in an interview weeks before the Stellantis announcement. He also pointed to recent discussions Ottawa held with Germany-based automakers and a Japan delegation.

And while Quebec might have booked the first battery-supply-chain deal, Mell said it is too early and the nascent industry too large to be limited.

“Ontario is still very much in play,” he said. “In fact, I think what might happen is now that you’ve got these two investments announced, it might prompt decisions to go Ontario’s way now that that real estate’s been occupied by two big players.”