Quebec battery industry | US Defense takes out the checkbook again

The U.S. Defense Department is once again taking out its checkbook for the Quebec battery industry, this time for a less controversial project. Nano One has obtained CAD$18 million to accelerate the production of cathode materials – the positive pole of a battery – in the plant it operates on the South Shore of Montreal.

The Vancouver-based company specializes in manufacturing cathode materials for LFP (lithium iron phosphate) batteries, a niche that is growing in popularity.

“Our process allows us to move away from the methods that come from China,” said Nano One founder and CEO Dan Blondal in a telephone interview with The PressThursday. It’s something [le 18 millions] which is a game changer for us.”

The US Department of Defense justifies its decision by a desire to support projects for the production of materials deemed “essential”. Batteries are often associated with electric vehicles, but LFP batteries, which are less expensive to manufacture, are popular, in particular, when it comes to storing energy.

Nano One had announced the acquisition of the plant located in Candiac in 2022. The chemical giant Johnson Matthey was the previous owner. It is still a pilot site. About 600 tons of cathode materials are produced there. The aim is to eventually reach around 2,000 tons. A large-scale plant can produce between 50,000 and 100,000 tons annually, according to some specialists.

“It’s relatively small compared to what we see in China, but it’s a stepping stone to something we want to roll out on a larger scale,” Blondal said.

At the right time

The money from Washington is coming at just the right time for Nano One. It will help replenish the coffers of the company that was founded in 2011. Since we are still talking about a young company, it is still in deficit and at the stage where it must dip into its financial reserves.

As of June 30, the company still had access to $15 million, compared to $23 million three months earlier. The support from the U.S. Defense has caused its stock price to jump on the Toronto Stock Exchange. As of Thursday morning, the stock was up 26%, or 18 cents, to trade at 88 cents.

Nano One’s Quebec projects are less publicized in the battery sector. The company, which would like to obtain the support of the Legault government, believes that it is now better equipped to achieve this, says Blondal.

According to him, discussions are going well with Investissement Québec.

Even though Nano One gets money from the United States, this financial support does not come with obligations to supply American defense.

“We still have the freedom to sell to whoever we want,” Blondal said. “What Washington wants is to increase North American supplies.”

Less delicate

For the US Department of Defense, this is the second intervention in four months in the battery sector. Last May, the American administration granted nearly 11 million CAD to Lomiko Metals, which is piloting the La Loutre graphite mine project, located in Haute-Gatineau.

This mineral could be used in the manufacture of batteries for electric vehicles.

The project of the mining company established in British Columbia, which has also obtained the support of Ottawa, is however far from unanimous. The Legault government has notably indicated that it cannot support it financially, at least for the moment, due to the lack of social acceptability.

Opponents fear the impact of an open-pit mine in an area near several resort lakes. Lomiko, for its part, has indicated that it will conduct feasibility studies and that it will be subject to review by the Bureau d’audiences publiques sur l’environnement (BAPE).

The mining company plans to begin construction in 2027.