GM and Posco halt expansion of Canadian cathode material plant

The Ultium CAM joint venture plant remains on track to begin producing cathode materials for EV batteries next year, according to media reports. However, the team will not proceed immediately with the expansion project as originally planned. “In light of evolving market dynamics, GM and our partners will pause the second phase of the project,” said Marie Binette, spokesperson for GM Canada.

General Motors and the South Korean group Posco first announced their plans for a joint cathode material plant in North America in December 2021 and a few months later selected Bécancour, Québec, as the site. The annual capacity of 30,000 tonnes was intended to supply the Ultium Cells battery plants, GM’s joint venture with LG Energy Solution.

Phase 1 of the project is currently under construction (although production was initially scheduled to start in 2024) and will continue as planned. “I am confident that Phase 1 will move forward,” said Québec’s Minister of Economy, Christine Fréchette. The subsequently announced Phase 2 was to focus on ramping up production and adding a new facility for precursor materials. This second phase is now suspended indefinitely. “My hope is that this pause will be of a limited duration, and that in the near future we’ll be able to relaunch the project,” Fréchette added.

The decision to forgo local precursor material production, at least temporarily, also affects GM’s supply deal with nickel supplier Vale. In a separate statement, Vale confirmed that GM would not require nickel sulphate for the time being. It must thus terminate its nickel sulphate plant project, the company said. The Brazilian miner had planned to build its own facility in Bécancour to supply GM with 25,000 tonnes of nickel sulphate per year.

The developments in Bécancour align with GM’s recent announcements. Earlier this week, the carmaker revealed it was realigning its powertrain strategy in response to current market demand and political conditions. The adjustment includes write-downs totalling 1.6 billion US dollars linked to scaled-back electric vehicle plans. Of this amount, 400 million dollars relate to the cancellation of contracts and business arrangements associated with EV investments – such as the deal with Vale.

Only a few years ago, Bécancour seemed poised to become a central hub for cathode material production for North America’s electric vehicle industry. Alongside the GM-Posco project, BASF had also announced a cathode material plant in the city, followed in 2023 by a major project from Ford, SK On and EcoPro BM. However, the German chemical company has since put its project on hold. “BASF will be ready to invest in North America, as soon as the market and customers need such local capacity” a spokesperson said at the time. Construction of EcoPro BM’s factory was also suspended last summer, and Ford has since withdrawn from the project.

yahoo.com, bloomberg.com, cbc.ca

This article was first published by Sebastian Schaal for electrive’s German edition.