A joint venture project between Posco Future M and General Motors has secured 300 million Canadian dollars ($221 million) in funding from Canada to build an electric vehicles' battery materials plant.
The provincial government of Quebec and the Canadian federal government on Monday announced the financial support plan to aid the joint venture project, named Ultium CAM, to construct the country's first cathode production factory. The public investment is aimed at strengthening the supply chain of a core battery material and nurturing the local eco-friendly sector such as EVs.
In July last year, Posco Future M and GM unveiled a plan to invest $633 million to build a cathode production plant in Becancour, Quebec, as they established Ultium CAM. The Canadian EV battery materials site will have an annual production capacity of 3 metric tons. According to officials, the plant is expected to be completed in the second half of 2024.
Cathodes, which are made up of nickel, cobalt, manganese, lithium and other materials, are a core component required to make EV batteries. Accounting for about 40 percent of the cost of EV batteries, cathodes determine how strong the batteries are.
Posco Future M said the funding from the Canadian public sector will allow them to pick up the pace with construction as the company seeks to establish a reliable supply chain of battery materials in North America.
"Setting up a stable supply chain of battery materials in North America and advancing the advancement of eco-friendly mobility industry are the common goals of Posco Future M, GM and Canada," said Yun Deok-il, head of the planning support division at Posco Future M.
"We appreciate the large investment support from the (Canadian) federal and provincial governments. We will cooperate more closely to strengthen the supply chain and create jobs."
The joint project between the Korean battery material producer and American automaker is forecast to create about 200 positions locally.
The Quebec provincial government will lend companies CA$152 million, of which CA$132 million will be forgiven if the factory maintains the promised jobs for 10 years, Canadian media outlets reported. The Canadian federal government will contribute up to CA$147 million, but the nature of the funding was not disclosed.
Posco Future M, the battery material producer under Korean steel giant Posco Group, has been aggressively expanding its production capacity to meet the surging global demand for EVs and their batteries.
The company plans to bring up the annual production capacity of cathode active materials to 280,000 tons by 2025 and 610,000 by 2030 from the current 105,000. The company is also working to expand the annual production capacity of anode materials from the current 84,000 tons to 150,000 by 2025 and 320,000 by 2030.