How the EV battery boom could change Bécancour, a quiet corner of Quebec, forever

Dreams of industrial glory are alive again in Bécancour, Que.

On the tidy main streets and busy eateries in this countryside city of 15,000 people, a hopeful buzz is in the air over a wave of new cutting-edge factories set to push up from the ground that could cement the area’s future for decades. An electric vehicle battery boom is nigh.

This is a collection of six villages across the St. Lawrence River from Trois Rivières, grouped together into one municipality for administrative convenience. Each has its own church and local history, and if you’re in the area, Bécancour’s tourism board suggests a hunt for “gnome homes” scattered among historical sites and a circuit of poutine restaurants to satisfy your culinary cravings.

Urban pockets quickly give way to fields, the entirety of it measuring a whopping 494 square kilometres. A massive arrowhead-shaped industrial park pierces eastward from the river as far as the eye can see.

Alcoa Corp. and Rio Tinto Group run a 1980s-era aluminum plant here. France’s Air Liquide SA has a facility producing hydrogen. Chemical makers Arkema Canada Inc., Cepsa Chimie Bécancour and Olin Canada ULC are all present, and TC Energy Corp. TRP-T has a natural-gas-powered cogeneration plant.

But many companies have decamped. Others said they would come but never did, their projects living more as fanciful mirages on the business pages of local newspapers. Norway’s Norsk Hydro ASA set up a magnesium facility but dismantled the plant around 2008. Hydro-Québec shut down the Gentilly-2 nuclear power station in 2012.

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Champlain

40

St. Lawrence

River

QUEBEC

Gentilly

132

Detail

Industrial

park limits

Trois-Rivières

Ste.-Gertrude

Bécancour

55

Sainte-

Marie-de-

Blandford

Précieux-Sang

Saint-Grégoire

Nicolet

QUEBEC

Saint-Célestin

5 km

JOHN SOPINSKI/THE GLOBE AND MAIL

source: openstreetmap

Champlain

40

St. Lawrence

River

QUEBEC

Gentilly

132

Detail

Industrial

park limits

Trois-Rivières

Ste.-Gertrude

Bécancour

55

Sainte-

Marie-de-

Blandford

Précieux-Sang

Saint-Grégoire

Nicolet

QUEBEC

Saint-Célestin

5 km

JOHN SOPINSKI/THE GLOBE AND MAIL

source: openstreetmap

Champlain

40

St. Lawrence

River

QUEBEC

Gentilly

132

Detail

Industrial

park limits

Trois-Rivières

Ste.-Gertrude

Bécancour

55

Sainte-

Marie-de-

Blandford

Précieux-Sang

Saint-Grégoire

Nicolet

QUEBEC

Saint-Célestin

5 km

JOHN SOPINSKI/THE GLOBE AND MAIL, source: openstreetmap

Bécancour has been searching for higher purpose for half a century – a critical mass of big business with a common raison d’être to finally put itself on the global map. Now, it might have found it: making battery materials for EVs in the global energy transition. What happens next could change this quiet corner of Canada in ways its inhabitants might never have imagined. After years of repeated disappointment, they’re getting ready for their close-up.

“You have to be an archaeologist to remember that we used to make cars in the late 1990s in Quebec,” says Pierre Fitzgibbon, the province’s Minister of Energy and Economy, alluding to General Motors Co.’s muscle car plant in Boisbriand and Hyundai Motor Co.’s short-lived manufacturing fling with Bromont.

“I think Bécancour is going to become – maybe I’m too optimistic – a true centre of battery materials for North America,” says Mr. Fitzgibbon, a chartered accountant and former investment banker. “I look at it from a capital investment perspective, and this is du jamais vu” (meaning it’s unheard of).

The desire by Western automakers to cut their dependence on China and map out new EV supply chains in Europe and North America has triggered a reset of their global footprints. Companies are scrambling to secure lithium, nickel and other minerals needed for battery production. And they’re forging alliances with new partners, plotting new factories to feed their dealer showrooms. It’s a once-in-a-lifetime shift that’s being fuelled by government backing on an unprecedented scale.

Countries are competing with each other for these high-tech facilities and Canada’s political leaders want many in Ontario and Quebec. The Trudeau government has agreed to provide subsidies that could reach $13-billion over a decade for a new Volkswagen AG battery plant in St. Thomas, Ont. That’s a shocking sum of corporate aid the government insists is justified by the economic spinoffs it will create.

Stellantis NV and LG Energy Solution are planning their own factory in Windsor, Ont., that will also be financed with help from Ottawa.

This is just the beginning. As society moves toward greater EV adoption, billions more are likely to be spent, by governments and the private sector. The governments of Canada, Quebec and Ontario have put up big taxpayer dollars to help the country win its share of manufacturing investment as automobile and battery makers shop their factories to the highest bidder.

Now, politicians have to sell that decision to a somewhat skeptical citizenry. As Quebec business commentator Pierre-Yves McSween cheekily put it: “We’re buying our place in paradise.”

Quebec has many of the minerals the auto industry needs as it goes electric. And it has something equally valuable: cheap, green hydropower – the kind needed for the energy-intensive task of pulling those minerals out of the ground to create cathodes and anodes, the basic components for EV batteries.

Circuit maker

Lithium-ion batteries rely on an anode made of graphite that easily surrenders electrons (negative charges) and a cathode made of a metal oxide that draws electrons. When a wire connects the two, the result is an electric current that can power a device such as a car. Meanwhile, lithium ions (positive charges) move within the battery to balance the electron flow. When a battery is recharging, the lithium ions move in the reverse direction and the battery is restored to its original state.

How a lithium-ion

battery works

Cathode (+)

(lithium, magnes-

ium, cobalt, nickel)

Circuit

Electrons

Lithium ions

Anode (-)

(typically

graphite)

Separator

(polyethylene)

Electrolyte

solution

(lithium salt)

Electric vehicle battery supply chain

UPSTREAM

MIDSTREAM

DOWNSTREAM

Raw materials/

production

Materials

processing

Cell

mfg.

Pack

mfg.

Electric

vehicles

End of life re-

cycling/reuse

the globe and mail, Source: graphic news;

nrdc; nature

Circuit maker

Lithium-ion batteries rely on an anode made of graphite that easily surrenders electrons (negative charges) and a cathode made of a metal oxide that draws electrons. When a wire connects the two, the result is an electric current that can power a device such as a car. Meanwhile, lithium ions (positive charges) move within the battery to balance the electron flow. When a battery is recharging, the lithium ions move in the reverse direction and the battery is restored to its original state.

How a lithium-ion

battery works

Cathode (+)

(lithium, magnes-

ium, cobalt, nickel)

Circuit

Electrons

Lithium ions

Anode (-)

(typically

graphite)

Separator

(polyethylene)

Electrolyte

solution

(lithium salt)

Electric vehicle battery supply chain

UPSTREAM

MIDSTREAM

DOWNSTREAM

Raw materials/

production

Materials

processing

Cell

mfg.

Pack

mfg.

Electric

vehicles

End of life re-

cycling/reuse

the globe and mail, Source: graphic news;

nrdc; nature

Circuit maker

Lithium-ion batteries rely on an anode made of graphite that easily surrenders electrons (negative charges) and a cathode made of a metal oxide that draws electrons. When a wire connects the two, the result is an electric current that can power a device such as a car. Meanwhile, lithium ions (positive charges) move within the battery to balance the electron flow. When a battery is recharging, the lithium ions move in the reverse direction and the battery is restored to its original state.

How a lithium-ion battery works

Circuit

Cathode (+)

(lithium, magnes-

ium, cobalt, nickel)

Electrons

Lithium ions

Anode (-)

(typically

graphite)

Separator

(polyethylene)

Electrolyte

solution

(lithium salt)

Electric vehicle battery supply chain

UPSTREAM

MIDSTREAM

DOWNSTREAM

Raw materials/

production

Materials

processing

Cell

mfg.

Pack

mfg.

Electric

vehicles

End of life re-

cycling/reuse

the globe and mail, Source: graphic news; nrdc; nature

The province wants to make the guts of EVs. Behind the scenes, it has been selling itself hard as a viable place to do that. Bécancour is close to major highways, railways and shipping lanes. And its industrial park is easily one of Canada’s biggest at 70 square km, offering ready-to-build land for factories that take up a mind-boggling amount of space.

All of that, topped with government financial incentives, has drawn the attention of several big-league multinationals, including GM, Germany’s BASF SE and Brazilian mining giant Vale SA.

Construction on Volkswagen’s planned plant, the size of 210 soccer fields, is expected to start next year. But in Bécancour, Canada’s all-in wager on EV battery manufacturing has taken root. Companies are making commitments and spending money to buy land, and concrete is being poured on site for new factory foundations. Here, negotiations between companies and governments have already started giving way to cranes and construction mixers.

Mr. Fitzgibbon estimates the value of projects announced and in the cards for Bécancour at $4-billion, with a possible doubling of that number if companies move forward with expansion projects on their properties. Quebec hasn’t seen private sector industrial spending of that size since Bombardier Inc. launched development of the C-Series airliner in 2008. The minister has said the government could invest as much as $3-billion to support EV battery projects in the city.

And this time, the momentum seems unstoppable.

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Bécancour was a thriving farming community in the 1960s when the Quebec government of then premier Jean Lesage designated it for a new vocation as a steelmaking centre, at a time nationalist sentiment was growing and state involvement in industrial development was growing with it.

Buoyed by its success bringing hydroelectric production under state control, Quebec also took a stake in a shipyard in Sorel and created an assembly plant cranking out French-designed Peugeot and Renault cars in Saint-Bruno-de-Montarville.

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In short order, Bécancour families who had spent generations growing vegetables or raising cows were forced to sell their properties and move further afield to make way for an industrial outpost set to pump out hot-rolled sheet metal. It was to be one of the province’s most ambitious society-building schemes to date, a megaproject for the masses that would reduce Quebec’s reliance on Ontario metal.

But it never happened. Quebec-owned steel maker Sidbec, now part of ArcelorMittal SA, decided to locate new steelworks 100 km downriver at Contrecoeur instead after it merged with Dominion Steel and Coal Corp. As the years went by, Bécancour was left with vast lands parcelled off for heavy industry, bolstered by deep-water port facilities, that have remained decidedly underused.

Today, the city is coming alive with new purpose under a new government vision. And people are asking again whether it will fly or flop.

“There is still skepticism” among the local population, says Donald Olivier, the head of the provincial crown corporation overseeing Bécancour’s industrial park. “People are saying ‘Okay, these announcements are nice and everything, but will it be like the past and they never amount to anything?’”

Doubt is fading, however. Several global giants are building footprints in Bécancour. A wave of smaller suppliers is expected to join them as they firm up plans and secure financing.

The most advanced project is a partnership between GM and South Korean battery materials maker Posco Chemical Co. Ltd., where construction workers are now laying down foundations and putting up steel framing for a new $500-million factory.

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GM and Posco announced last year that the plant will produce so-called “cathode active material” for batteries that will power GM’s Chevrolet Silverado pickup truck and GMC Hummer EV, among other vehicles. It’s the first of what is expected to be several subsequent projects by the automaker on the property.

“Canada offers tremendous opportunity to be a major new part of the critical minerals sourcing, processing, and recycling that we will need as we manage the rapid transformation to an all-electric future,” GM Canada President Marissa West said in an e-mailed statement. GM wants to have the capacity to crank out one million electric vehicles in North America by the end of 2025.

Others are betting on Bécancour too. BASF, the world’s largest chemical maker, has locked up a big parcel of land in the industrial park as it readies its own project. It hasn’t yet bought the property, so can’t start building, but the land has been cleared.

Mining titan Vale has announced it will supply battery-grade nickel sulfate to GM from Vale’s proposed plant at Bécancour. And Ford Motor Co. signed a letter of intent with EcoPro BM Co., South Korea’s leading battery material producer, as well as EV cell maker SK On Co. to jointly invest US$704-million for a new cathode factory in Bécancour, The Korea Economic Daily reported. The project location has not been officially confirmed.

The Pallinghurst Group, a European private equity investor, sees Quebec becoming a dependable pillar for battery materials supply in North America. London-based Pallinghurst has invested more than US$500-million to date in two key mining and materials processing projects in the province, with plans for more.

The company scooped up mining company Nemaska Lithium Inc. out of bankruptcy protection in a partnership with the Quebec government’s investment arm, and it’s built up a 15-per-cent position in another supplier, Nouveau Monde Graphite Inc.

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Nemaska controls the Whabouchi mine in Quebec’s northern James Bay region, one of the world’s richest deposits of spodumene – a mineral source for lithium, the sought-after, silvery-white metal used in consumer electronics and EVs. Nouveau Monde specializes in battery anode material. Both companies have staked out spots in Bécancour.

“We remain all-in on Quebec,” Pallinghurst’s co-managing partner, Arne Frandsen, told The Globe and Mail. “You have the combination of world class natural resources and the political willingness to think big.”

“In addition, you have the system in place that allows you to invest in a sensible and very transparent manner. On top of this, Quebec has Investissement Québec, which is a blue chip and most supportive investment partner. To me, this unique cocktail is what it’s really about,” he said.

Quebec has long espoused a strategy of using its vast hydropower resources, the bulk of which are produced by dams in the north built decades ago, to lure investment. It is home to several energy-intensive industries, such as aluminum production and mining, that pay among the cheapest electricity rates in North America.

The Legault government is keen on expanding that strategy to woo more investment and drive growth, particularly by attracting companies that can help build an industrial base centred on electric propulsion systems. The goal is to play host to companies working on various links along the battery supply chain, from extracting minerals to recycling batteries. And while the province doesn’t have any automakers assembling cars and SUVs, it does have manufacturers of electric buses and power sports vehicles.

Quebec’s investment arm is leading the charge in commercial negotiations with EV players, taking ownership positions in some projects and dangling loans for promoters on attractive terms they could never get from banks. For its part, Ottawa has earmarked $80-billion in tax credits in its spring budget for clean technology over the next decade.

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The two levels of government are working together on Quebec’s electric aspirations. But whether they’re successful in their plans for Bécancour hinges in part on how prospective investors weigh competing jurisdictions, chiefly the United States.

The U.S. Inflation Reduction Act contains an estimated US$500-billion in new spending and tax breaks aimed in part at boosting clean energy. The sheer scale of that spending threatens to leave Canada’s behind in the EV race if it can’t keep pace.

Ottawa and Quebec City are striving to win one particular battery manufacturing investment at the moment that pits Bécancour against one or more unnamed U.S. sites. Government officials have a detailed side-by-side financial analysis of the project plan comparing U.S. and Canadian financing – and there’s a gap the Canadians are struggling to match, Mr. Fitzgibbon says. He declined to name the companies involved.

Mr. Fitzgibbon remembers the light-bulb moment that Quebec’s EV potential began to crystallize in his mind. In late spring 2019, he was in Hannover, Germany, visiting Volkswagen. When he walked into one meeting, a petite woman was sitting at a table with a map of Quebec spread out in front of her highlighting all the lithium claims in the province, he recalls. “She knew more about lithium than I did at the time. This is when I realized there’s something going on here.”

Today, the minister is making deals left and right. The government is so intent on making sure EV battery manufacturers and suppliers have what they need from the moment they land on site that it’s spending $350-million on new infrastructure in Bécancour’s industrial park. Over the past year, crews began building new access roads and laying water, electrical and fibre-optic systems underground – all before the ink is even dry on most investment agreements. Power will flow from two Hydro-Québec substations.

The province is working with local authorities and real estate developers to erect new housing in the city. And it’s rallying local colleges and educational institutions to develop a pool of workers who are industry-ready, though much of the top talent in the hub’s initial phase is expected to come from outside the country.

Much of the machinery will be imported too. Ships will dock at Bécancour’s port and equipment ready-made for the factory floor from South Korea will roll straight off the boats onto trucks for the roughly 10-minute drive to the new cathode plants, Mr. Olivier says.

South Korea has developed a deep experience in the industry and battery specialists from that country will also come to Bécancour as work progresses. Mr. Olivier sees the city taking on a decidedly Korean flavour in the years ahead.

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Mr. Olivier is Quebec’s man on the ground here, the guy in charge of reassuring prospective investors they’ll have what they need on site. The wavy-maned executive, who led the shutdown of the Gentilly-2 nuclear plant, is a thoughtful, relaxed kind of leader. No fancy shoes, no tie. These days, he’s got his hands full.

“This is a race against the clock,” for automakers trying to comply with government mandates on EV production as they phase out gasoline-powered vehicles from their lineups, Mr. Olivier says. Canada is banning the sale of fuel-burning new cars and trucks as of 2035 as it tries to reach net-zero emissions.

To meet the regulations, carmakers are bringing industrial expertise close to where they sell their vehicles, including this continent. “There is a strong will to develop a North American supply chain,” he says. “That runs through Canada and it runs through Quebec.”

Traditional construction timelines have been thrown out the window amid the urgency. GM-Posco became owners of their plot on Dec. 19 last year and launched construction of the factory barely two weeks later, in the dead of winter. “In January it was lights on at 6:30 in the morning until 8:30 at night,” Mr. Olivier says. “Other investors will probably do the same thing.”

The pressure is on for Mr. Olivier’s team as well. If closing a nuclear plant had technical challenges, the obstacles here are more deadline-driven, he says. Roughly $100-million of his $350-million infrastructure kitty has either been spent or committed through contract awards, and roughly three-quarters of it will be used by the end of the year.

Major work remains to be done, including building a new section of rail line and rebuilding a water treatment plant. All of it has to be completed in time for manufacturers to start operations in the summer of 2025.

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Down the street at Bécancour city hall, Mayor Lucie Allard strikes an optimistic tone about what lies ahead for her municipality, even as change is coming fast. She’s been mayor for about 18 months and when she campaigned, nobody was talking about a rapid expansion of the EV battery industry. In fact, nobody was talking about batteries period. “It wasn’t at all in the cards,” she says.

Now, after an assortment of corporate citizens over several years, automotive and battery heavyweights have come knocking. The mayor says it’s very welcome.

“People are rallying around the idea that this development is coming and they feel that they’re part of it, that they have a stake in its success,” Ms. Allard says.

Still, she says, there is already enormous pressure to make it work. Hundreds and potentially thousands of newcomers employed by the battery companies will need housing. If they settle in Bécancour, they will need schools and daycares. A new elementary school is currently being built, but the city has no high school.

Finding experienced labour could also be challenge, particularly in an economy near full employment. The battery industry will surely attract workers from Trois-Rivières and other nearby towns. But businesses with existing operations in the industrial park are already fretting privately about their employees jumping to the EV manufacturers, Mr. Olivier says.

Many private-sector companies are hungry to take advantage of the potential windfall that comes with an economic development strategy sponsored by government. Real estate promoters are jostling for land and permits in Bécancour, and one local company, Groupe Fournelle, is setting up a plant to make home construction modules (think walls, floors, roofs) so it can complete its housing projects faster. The city’s phones are ringing non-stop with calls from people with project plans seeking meetings with urban planning staff, the mayor says.

City officials estimate that within five years, Bécancour’s population will swell by one-third to 20,000 people. That threatens to put a significant strain on municipal infrastructure and services, which will need to be expanded. Ms. Allard says the goal is sustainable development that maintains the quality of life of residents.

“We know there’s collateral damage in all of this,” she says. “It’s not just smokestacks that we want in Bécancour. We want people to come live here, raise their families, be close to their workplace.”

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How this will all shake out remains to be seen. As major EV and battery manufacturers cement their plans for North America, Bécancour seems set to receive a growing piece of the action. Other major companies will come. And more suppliers will set up in their midst.

But there’s a limit to how far political leaders will roll out the red carpet here and elsewhere. And much of that, in Quebec at least, depends on how much electricity is available.

“Quebec has never had the opportunity to build such a cluster and I want to be cautious,” Mr. Fitzgibbon says. The province is currently dealing with requests from sponsors of “decent projects” in all industries (not just automotive and batteries) that would soak up about 10,000 megawatts of power if they were all approved, he says. And there’s not enough electricity for that.

Mr. Fitzgibbon says the government wants to get the battery materials making cluster as robust as it can in Bécancour, but that the city can absorb a maximum of two additional major cathode projects for the foreseeable future.

“It’s enough. At one point, I’m equally concerned about execution, talent, housing,” he says. “You have to be careful. You don’t want to go too far.”

The minister already has his sights on other EV projects in other parts of Quebec. The Montreal area could accommodate an EV battery cell manufacturer, he says, which is the next step in the supply chain after materials processing.

And he says he’s working on developing “another Bécancour” somewhere else, because the province has enough minerals for multiple cathode material producers and they can’t all be located in one place. He says the Saguenay region, known for its aluminum smelters, is one possibility.

There are striking similarities between Quebec’s EV battery opportunity and its experience with the aluminum industry, says Erik Richer La Flèche, an energy and mergers and acquisitions specialist at law firm Stikeman Elliott LLP who recently retired.

The province has nurtured and assisted the aluminum industry for decades to the point it is now its number one export. But while Quebec is a powerhouse in primary aluminum production, it is much weaker in transforming the metal and has almost no local ownership in the industry. It has to solve that piece of the puzzle this time to create more wealth, he says.

“If Quebec can improve upon what has happened for the last 40 years in the aluminum sector, then the battery EV file will be beneficial,” says Mr. La Flèche. That means “more Quebec ownership, less component and more finished goods production, and a clear understanding of the electricity needs of the sector over the medium and long term.”