Rio Tinto issues layoffs, pauses construction at Quebec lithium plant
Work on the EV battery chain facility, nearly 80 percent complete, has been forced to stop.
BECANCOUR · Majority owner Rio Tinto has issued dozens of layoff notices at the Nemaska Lithium plant site in Bécancour, Que., forcing a pause in construction. The work on an electric vehicle battery supply chain was nearly 80 percent complete. The move is the latest setback for the town in a region dubbed "Battery Valley," casting doubt on local plans for an EV manufacturing hub. Rio Tinto said future investment and timing depend on an ongoing evaluation. "Decisions on further investment and project timing at Bécancour will depend on the outcome of the evaluation, project economics, market conditions, and customer needs," the company said in a statement.
The mining giant said it remains confident in the long-term prospects for lithium processing in Quebec and Canada. This comes despite a slump in lithium prices and a slowdown in global demand for battery materials and electric vehicles. The pause affects a facility central to Quebec's strategy to establish a domestic EV battery manufacturing chain. The province had pledged to develop Bécancour into a hub for that industry. The town had anticipated the project would bring 1,500 direct jobs and 5,000 indirect positions in sectors like restaurants and services.
The local population had grown with the arrival of construction workers, prompting plans to expand schools, build housing and upgrade fire station equipment. However, a slowdown in EV sales led to project delays and cancellations elsewhere. Nemaska itself announced in March it would scale down the pace of building its processing plant. The Quebec government, which owns 46.1 percent of Nemaska, stated this week it will not provide any additional funding for now. "Our sincere hope is that this is going to work, because I don't want to be the guy to write off the $1.1 billion we invested," said Quebec Minister of Economic Development, Innovation and Energy Stéphane Paquet.
Some local officials view the current challenges as temporary obstacles on the path to electrification. "The battery file is here to stay," said regional prefect Mario Lyonnais. "I am confident that the Nemaska plant will open. When it does, we will be ready and we will continue to prepare." He noted the rapid pace of the initial battery boom made it difficult for municipalities to scale up services quickly. Lyonnais suggested the slowdown might give the area more time to prepare fully for the plant's eventual opening and the economic boost expected from EV battery manufacturing.
With files from BNN Bloomberg