Belgium's Umicore plans C$1.5 billion battery materials plant in Canada's Ontario

By Ismail Shakil

OTTAWA (Reuters) - Belgium's Umicore plans to invest C$1.5 billion ($1.2 billion) to build a battery materials manufacturing plant in Canada's Ontario province that would supply parts to one million electric vehicles by 2030, Ottawa said on Wednesday.

The Canadian government and Umicore have signed a memorandum of understanding for the facility and will start negotiations on a formal agreement that would include federal support for the project, an official statement said.

Umicore, a materials technology and recycling company, said separately that it was in negotiations with several potential customers for production contracts in North America.

Construction of Umicore's facility, planned to be net-zero on emissions and create hundreds of permanent jobs, is targeted to begin in 2023 with operations planned for the end of 2025, Umicore said.

"Umicore's intention to establish its new facility in Loyalist Township (in eastern Ontario) is another major step forward as we make Canada a global leader in producing electric vehicles," Canadian Prime Minister Justin Trudeau said in the statement.

Trudeau's Liberal government has pledged to cut climate-warming emissions 40-45% below 2005 levels by 2030 and reach net-zero by 2050.

The Canadian government sees the auto sector as a key part of its efforts to lower the national carbon footprint. Earlier this year, Canada committed to setting a mandate to ensure that all new light-duty vehicle sales are zero-emission by 2035.

Auto parts are Canada's fifth-biggest export industry and the auto sector contributes $16 billion annually to Canada's gross domestic product, based on official data.

Ontario is geographically close to U.S. automakers in Michigan and Ohio, and General Motors Co, Ford Motor Co and Stellantis NV have all announced plans to make electric vehicles at factories in the province.

($1 = 1.2977 Canadian dollars)

(Reporting by Ismail Shakil in Ottawa. Editing by Jane Merriman)