Ontario makes a lot of cars. Québec does not. But the French-speaking province is getting into the global EV sweepstakes by pursuing an end-to-end EV battery strategy that begins with its abundance of critical minerals such as graphite, cobalt, lithium and nickel and has come to include U.S.-style incentives to lure battery makers to Québec. The strategy hit max paydirt in September, when Sweden’s Northvolt committed to one of Québec’s biggest-ever investments, a $5 billion EV battery hub in Saint-Basile-le-Grand and McMasterville, just east of Montréal.
Hailing the announcement, Québec’s Minister of Innovation, Science and Industry Francois-Philippe Champagne characterized it as “more than just a battery cell manufacturing project. It is the culmination,” he said, “of our desire to attract the world’s biggest players” in the green economy. Champagne, who has spearheaded Québec’s EV strategy, said Northvolt chose the Québec location from among more than 70 prospective worldwide sites, lending, he said, “a strong vote of confidence in the EV ecosystem we are currently building in Québec.”
While Northvolt officials touted Québec’s evolving supply of critical minerals, its abundant green hydropower and “world class talent,” the deal only came to fruition after the federal and provincial governments offered a package of incentives that roughly matches what the company might have received in the United States through the Inflation Reduction Act. The announcement stated that Northvolt will qualify for up to $1 billion* each from Canada and Québec. It pointed out that “operating support provided” will only be available for as long as IRA incentives remain in place.
The Northvolt facility, which is to employ up to 3,000 people, would be one of the largest battery plants in North America when it begins production in 2026, and officials say its range of capacities will be nigh unmatched outside of Asia. In addition to producing battery components and materials, the site will also include a recycling center that Northvolt says will yield about half of the raw materials required for EV batteries.
“By recovering quality metals from used batteries, Northvolt will help to ensure that Canadian raw materials remain in circulation,” read a statement from the office of Prime Minister Justin Trudeau, which boasted that Québec will become the source of “the world’s cleanest batteries.”
An Untapped Abundance of Critical Minerals
Karim Zaghib, professor of chemical and materials engineering at Concordia University in Montréal, has served as a senior advisor to Québec’s EV strategy group. Proclaiming in an interview that one cannot find another place in the world that has Québec’s concentration of critical minerals for battery production, Zaghib offers a vivid illustration of the potential behind that.
“Take Tesla,” he says. “They order the battery from Panasonic in Nevada. The lithium for it is coming from Chile, it’s processed in China and then it goes to Japan. The nickel comes from Indonesia and it’s processed in Japan with materials from China. The cobalt is coming from Congo and goes through Norway, China and Japan. Then all of it goes to Nevada.” It’s a process, he suggests, that’s both logistically backwards and environmentally suspect, in particular given the carbon emitted in transit.
The challenge for Québec and the rest of North America is setting up a supply chain — one that includes processing — the whole of which western governments and automakers have been content to cede to China. At least until now, as export restrictions threatened by Beijing combined with the new North America assertiveness — expressed largely through dollars, both U.S. and Canadian — have effectively changed the game. President Joe Biden states flatly that “we greatly need Canada” for critical minerals to support EV production.
The acquisition in January of a prolific deposit in eastern Québec by Nouveau Monde Graphite is among the latest of several steps in that direction. NMG, based in Montréal, plans to develop it toward a targeted annual production of 500,000 tons of graphite concentrate, which would make it, the company says, “one of the world’s largest graphite projects in development.”
It’s NMG’s second graphite project, the significance of that being that currently there is one operational graphite mine in all of North America. NMG’s initial Matawinie mine in southern Québec is far enough along in development that the company has engineered offtake agreements with Panasonic and GM to cover about 85% of its projected production, according to Julie Paquet, NMG’s vice president of communications and ESG strategy. GM and Panasonic, Paquet tells Site Selection, have committed to investments totaling $275 million.
A Battery Hub Emerges
Parallel to its two mining projects, NMG is in the engineering and permitting stage, says Paquet, for a planned $660 million processing plant in the town of Bécancour on the St. Lawrence River. Its Bécancour Battery Materials plant is expected to supply the North American market with 43,000 tons of active anode material per year, enough to support the annual production of some 220,000 EVs. The 2.1 million-sq.-ft. facility, the company says, will enjoy access to robust industrial infrastructure, clean and affordable hydroelectricity, a direct supply of chemicals and a multimodal logistics base, anchored by Bécancour’s deepwater port.
“Beyond its industrial capacity and the synergy from the battery industry,” says Arne Frandsen, NMG Chair, “Bécancour is a region full of talent, dedication and expertise.”
The 17,300-acre Bécancour Industrial Park, lavishly supported by the federal and provincial governments, is rapidly emerging as a significant battery hub. General Motors, BASF, Vale, Nemaska Lithium and, most recently, Australia’s Lithium Universe are making major battery-related investments there. In August, Ford, South Korea’s EcoProBM and SK On announced plans for an $880,000 million battery cathode factory at the park, supported by close to $500 million in loans from the federal and Québec governments.
“We chose Bécancour, Québec and Canada for a number of reasons,” said Jae-hwan Joo, CEO of Chongju, South Korea-based cathode specialist EcoPro BM. “For the skilled workforce here and the strong federal and provincial governments, for access to advanced battery lithium minerals, for access to stable, clean and inexpensive hydroelectric power generation. For Bécancour’s water port, and well-organized infrastructures including highways, railways and shipping lanes. EcoPro BM is in Bécancour for a long time.”
*Unless otherwise noted, dollar figures in this article are in Canadian dollars. At press time, the exchange rate was C$1 = US$0.7356.
