Shares in Umicore (EBR: UMI) rallied on Tuesday after the Canadian and Ontario governments pledged to grant the battery maker C$975 million ($715 million) to support its cathode materials factory in Loyalist Township.
The plant will cost up to C$2.7 billion and supply enough material for 800,000 electric vehicles produced by manufacturers, including BMW. As a result of the announcement, Umicore cut its forecast for capital expenditure between 2022 and 2026 to €3.8 billion from over €5 billion.SIGN UP FOR THE BATTERY METALS DIGEST
SIGN UPThe company is one of the few Western suppliers that produce cathodes for EV batteries.
“Investment in Canada represents the final step in creating a truly global production presence,” CEO Mathias Miedreich said in a statement.
Umicore has a joint venture with Volkswagen that has also contributed to lowering its capital spending forecasts. The Ionway unit announced last week that its first plant for cathode material production in Europe would be set up in Nysa, Poland.
Umicore’s overall production capacity will reach 195 gigawatt-hours by the end of 2026, down from previous plans for 230 GWh.
Shares of Umicore surged 13% on the Brussels Stock Exchange by 12:10 p.m. EDT. The company has a market capitalization of $6.54 billion.
