Umicore to pause construction of battery materials plant in Canada
CEO Bart Sap cites complex transition to electric mobility
Cost-cutting measures to save 40 million euros by 2025
Shares rise after early fall
Adds analyst, paragraph 4, shares, paragraph 5, detail on cost cutting measures, final three paragraphs
By Nathan Vifflin
Nov 6 (Reuters) -Metals recycler and battery materials producer Umicore UMI.BR will pause construction of a battery materials plant in Canada, it said on Wednesday.
The Belgian-based group launched a review of its business in July, and said it had postponed "large scale" investments in an unspecified battery recycling plant in Europe, as well as for one in the municipality of Loyalist, Canada.
"Umicore is navigating a challenging environment where we feel the impact of the complex transitioning of the automotive industry towards electric mobility. Serving our North American customers out of Korea is now clearly the most effective use of our assets," CEO Bart Sap said in a statement.
Analysts of Jefferies welcomed the decision, saying it rationalises plans to improve return on capital for its loss-making battery material business.
By 0900 GMT, Umicore shares were up 1.5%, having recovered from a 2% drop at the market open.
Umicore, which makes catalytic converters as well as providing battery materials for automakers, said it had not drawn on incentives provided by the Canadian government, and that, if the construction resumes, it would access them under same conditions, including employment commitments.
Umicore also gave detail on the cost-cutting measures it announced in July, saying they would contribute 40 million euros ($42.94 million) of savings in 2025.
They would also affect around 260 positions, 100 of which are in Belgium, said the company that has 12,000 employees in all.
It said it had begun consultations with trade unions, and intended to resize the workforce of its battery materials division predominantly in its Jiangmen, China production plant, while also cutting R&D activities located in Hørsholm Denmark.
($1 = 0.9316 euros)
Reporting by Nathan Vifflin in Gdansk; editing by Milla Nissi and Barbara Lewis
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