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Belgian metals refiner Umicore SA UMICF is building a $1.5-billion factory near Kingston, Ont., to produce components for electric-vehicle batteries, the latest in a series of Canadian investments by global automotive manufacturers.

When Umicore’s facility opens in three years, approximately 700 employees will make battery parts from metals such as nickel, cobalt and lithium, most of which are mined in Canada. The move creates a “supply chain ecosystem for electric-vehicle manufacturing,” François-Philippe Champagne, Minister of Innovation, Science and Industry, said in an interview.

In recent months, automakers General Motors Co. GM-N, Honda Motor Co. Ltd. and Stellantis N.V. STLA-N, parent of Jeep and Chrysler, have announced plans to build battery and electric-vehicle manufacturing facilities in Ontario.

In an interview, Umicore chief executive Mathias Miedreich said the company spent more than six months reviewing sites before deciding to anchor its expansion in Loyalist Township near Kingston, rather than the U.S., after its automaker customers consistently endorsed Ontario.

“We looked at economic considerations, along with CO2 efficiency, and found Canada was the best place to be,” said Mr. Miedreich. Umicore is one of the world’s largest refiners, with 11,000 employees in 46 locations around the world, including 10 North American factories.

“Umicore’s intention to establish its new facility in Loyalist Township is another major step forward as we make Canada a global leader in producing electric vehicles – from minerals to manufacturing,” said Prime Minister Justin Trudeau, who was in Kingston on Wednesday to announce the project.

Construction on Umicore’s 350-acre site is expected to begin next year and be completed by 2025. The plant will be capable of supporting automakers who build a million electric vehicles each year, almost 20 per cent of projected North American production at the end of the decade.

Umicore’s corporate strategy is focused on sustainable manufacturing. Mr. Miedreich said the company decided to build in Ontario in part because the province’s grid – largely fuelled by hydroelectric and nuclear power – supports a factory that can produce battery components with net-zero carbon emissions.

Umicore also opted for an Ontario plant to shorten its supply chain with North American automakers. “We want to be part of an EV industry that is truly net-zero emissions,” said Mr. Meidreich. “It’s very difficult to achieve that goal when you are shipping materials to and from Asia or Europe.”

Vic Fedeli, provincial Minister of Economic Development, Job Creation and Trade, said in a press release: “This important investment by Umicore will turn Ontario into a North American leader in this high-value segment of the EV supply chain and further connect Northern Ontario’s mineral sector to EV manufacturing in the south.”

Earlier this year, electric-car makers Rivian Automotive Inc. RIVN-Q and Tesla Inc. TSLA-Q warned of future battery supply constraints because of a lack of raw materials.

Brussels-based Umicore is the only large battery component producer headquartered outside of China, and Mr. Champagne said the company’s decision to expand in Canada shows a shift in thinking around global supply chains that began with the onset of the COVID-19 pandemic. Mr. Champagne said: “For manufacturers, the emphasis now is on resilience over efficiency.”

The federal government will provide financial support for the Umicore facility. Mr. Champagne said terms of the investment are still being negotiated and will be disclosed at a future date. “This investment is not about subsidies, because everyone offers those, it’s about talent, and the Canadian EV ecosystem,” he said.

Umicore considered U.S. sites for its battery component factory, as the company’s existing operations include a factory in Tennessee. Mr. Meidreich said after months of talks with federal and provincial offices, the company was won over by the fact that in negotiations, “Canada spoke with one voice.”

Since 2020, Ontario has attracted nearly $14-billion in automotive investments, including more than $11-billion of commitments to electric-vehicle and battery production, according to the provincial and federal governments.

Umicore’s new facility will transform raw materials into essential battery components known as precursor cathode-active materials and cathode-active materials. Cathodes account for about 50 per cent of the value of an EV battery. Umicore currently manufactures cathodes at factories in Finland, Poland, South Korea and China.

The Belgian company is also a world leader in recycling metals, including used batteries, and Mr. Miedreich said Umicore plans to open additional facilities in Canada as the electric-vehicle industry expands.

Founded in 1805 when Napoleon Bonaparte gave the company control of a Belgian zinc mine, Umicore shifted its focus to processing metals in the 1990s. It is now one of the world’s largest refiners and a major automotive supplier, with sales of €4-billion last year and €7.9-billion market capitalization.

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