Battery Industry Roadblocks & Project Cancellations

The Quebec battery industry continues to be short-circuited. Three years after jumping into the adventure, the Legault government lost nearly 30% – at least 435 million – of the sums already disbursed to support projects in addition to seeing two others disconnected. Added to this are the millions to modernize the place identified as the cradle of this ecosystem.

We must add the names of Ultium CAM and Vale to the list of files which take an unexpected turn. The joint venture formed by General Motors (GM) and POSCO is putting its battery materials manufacturing expansion on hold in the Bécancour industrial and port park, in Center-du-Québec.

Result: the Brazilian giant, which was to supply this complex with nickel sulfate, an element which is used in the manufacture of cathodes, the positive pole of a lithium-ion battery, abandons its project for a 325 million factory which was to see the light of day near Ultium CAM.

“Phase 1 is in no way compromised and we currently have 125 employees,” says Ultium CAM communications director, Annick Bousquet.

The tiles are piling up

Nevertheless, the collapse of Northvolt, the unexpected withdrawal of Ford to Bécancour, the exit of Lion Électrique and the collapse of Taiga… What was to be a pillar of the Legault government’s economic strategy has been accumulating setbacks for more than a year.

The concept of the “recycling mine”, where Quebec aims to welcome projects at almost all stages of the value chain, seems less and less realistic in the short term.

“We have jobs that are created for the long term,” replies the Minister of the Economy, Innovation and Energy, Christine Fréchette, on the sidelines of an announcement in Mirabel on Thursday. Certainly, it is subject to a slowdown, but on an international scale. This slowdown is not the fault of Quebec. The repercussions are more positive than negative. »

To finance multiple projects, Quebec did not hesitate to loosen the purse strings with regard to the battery sector. According to our calculations, at least 1.5 billion has been disbursed so far in equity investments, grants and loans. Together, the failures of Northvolt, Lion Électrique and Taiga caused taxpayers to lose more than 435 million. On Thursday, the Ministry of the Economy, Innovation and Energy had not responded to a request for The Press aimed at clarifying the amount disbursed to date.

A consolation prize for taxpayers: Quebec never paid the aid promised to Vale and Ecopro. There are therefore no public losses associated with these projects.

M^me Fréchette retorts that “3,000 workers will work every day in Bécancour to build factories” which must start next year as well as in 2027.

It remains to be seen whether these files will be more successful.

Let’s take the example of Nemaska ​​Lithium, a 3.6 billion project whose bill is likely to continue to rise.

Since 2018, Quebec, which owns half of the company, has injected more than 965 million. This is Quebec’s largest financial commitment in the battery sector. At this stage, there is no guarantee that the Quebec state will be assured of recovering its logs even if Rio Tinto is the other co-owner.

The lithium refining plant has still not started and the mining component of Nemaska ​​Lithium, in Whabouchi, about 300 kilometers from James Bay, is struggling with delays and cost overruns.

Nouveau Monde Graphite, which received an investment of 85 million from Quebec, has still not formalized its decision to build a factory in the Bécancour industrial park to refine graphite for the manufacture of battery materials.

Limited access?

How did we get there? There has been a slowdown in enthusiasm for the electric shift and numerous setbacks in terms of regulations south of the border.

The uncertainty arising from the Trump administration’s trade war also has something to do with it, believes Yan Cimon, full professor of strategy at the Faculty of Administration Sciences at Laval University.

It’s difficult to make major investment decisions without knowing whether Washington could put up trade barriers.

“Access to the American market still exists, but it is more expensive,” explains the expert. If the projects were designed with the American market in mind, as soon as there are pitfalls on that side, it hurts a lot. Car manufacturers are very fearful. »

Alongside affordable hydroelectricity and qualified labor, Quebec’s proximity to the American market was among the assets that the Legault government put forward to convince battery manufacturers to come and set up here.

It must be admitted that this access is key to continuing to bring land projects into the Quebec sector.

Another bill

Development of a railway line of approximately five kilometers, new road access along Highway 30, which crosses the industrial park, and overhaul of the wastewater treatment system… These are examples of work that the Bécancour industrial park has had to carry out at full speed since 2022 in a context where project announcements are multiplying.

The bill is estimated at 330 million and mainly financed by the organization. The Legault government had nevertheless advanced 38 million in 2022 to help the industrial park prepare the ground.

Three years later, there are fewer tenants than expected.

The game was worth it, says Mr. Cimon. In the medium term, we can expect a “restart” of transport electrification, he adds. And if it takes longer than expected, “other industrial players” may be interested in an industrial park with “world-class infrastructure”.