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Quebec investment company says battery industry will get another $15 billion in projects

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The size of the investments promised in the battery industry could double again in the next few years to reach $30 billion, according to the head of Investissement Québec.

The projects announced in the battery sector represent total investments of nearly $11 billion. To this can be added nearly $4 billion in investments to be announced "shortly."

"Another $15 billion is being discussed and will be announced over the next few years," says Guy LeBlanc, President and CEO of Investissement Québec, in an interview prior to a speech he is due to give to the business community in Bécancour on Tuesday. "Essentially, these are phase two and phase three projects to increase the capacity of the plants already announced."

LeBlanc considers that "the essential part" of Quebec's battery ecosystem is now complete.

However, the government is planning to add "small missing pieces that we are working on."

As an example, he spoke about the production of synthetic graphite, which would be added to the graphite production of Nouveau Monde Graphite.

With Quebec's limited energy capacity, LeBlanc said the government will no longer be courting large cell manufacturers.

"Given the energy limitations at the moment, going out to find another cell manufacturer, for example, would be problematic," he said.

The battery industry can do without the project by German giant BASF, which was announced in the spring of 2022 and was due to be completed in Bécancour in 2025, said LeBlanc. The project is in limbo while the company looks for partners in the automotive sector.

Even if it doesn't materialize, BASF's announcement has done useful work by putting the spotlight on Quebec, argued LeBlanc.

"It was really well received by the international community and by certain players who weren't sure they wanted to come to Quebec because Quebec wasn't on the battery industry map. BASF's announcement was an important factor," he said. "Following our success, we had to manage the traffic. If BASF had decided to call (its project) into question a year and a half ago, that would have been more of a problem. (There is) no problem."

JUDICIOUS INTERVENTION?

The government's intervention in the battery industry has not been without its critics, from environmentalists who are concerned about the impact of the construction of the Northvolt plant on flora and fauna to the opposition, who feel that Quebec is taking too great a financial risk.

LeBlanc defended the government's financial intervention to attract businesses. He points out that a large part of government intervention is in the form of loans or equity investments.

As for forgivable loans, he said that they will take into account the economic spin-offs of the companies that have benefited from them.

"In theory, if these projects come to fruition and these private investors make money, we'll make money too. That should compensate for the subsidies (loans that indirectly become subsidies by being forgiven),"

The head of Investissement Québec believes that history will prove the government's strategy right.

"I have the impression that the benefits of the battery industry will be recognized more in five to ten years' time," he said.

He pointed out that experts are predicting "exponential" growth in the electric car industry, with the size of the global electric vehicle fleet expected to increase tenfold between 2020 and 2030.

LeBlanc cites an article in the specialist media Benchmark Minerals, which predicts that 28 per cent of North American cathode production, which goes into making a battery, will come from Bécancour in 2030.

He said that Investissement Québec's internal estimates come up with a relatively comparable figure: "It's a position that allows you to stand out."

This report by The Canadian Press was first published in French on Nov. 28, 2023. 

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