Umicore’s Battery Materials Sales Plunge by 30% Amid EV Market Headwinds

Umicore

Northvolt collapse and weak demand weigh on Europe’s battery supply chain

Battery Materials Division Suffers Sharp Decline

Umicore reported a 30% drop in sales from its battery materials division in 2024, totaling €386 million. The Belgian chemical company cited declining demand across Europe and global weakness in electric vehicle (EV) sales as key drivers. Chief executive Bart Sap described the year as “sobering,” pointing to stalled EV adoption and strategic setbacks. As a result, Umicore paused development at its Canadian plant and tightened capital spending.

Northvolt Bankruptcy Disrupts Strategic Supply Agreement

A major blow came from the bankruptcy of Swedish battery manufacturer Northvolt, which filed in March 2024. Northvolt had signed a long-term supply agreement with Umicore in 2021 for cathode active materials (CAMs). This deal was central to Umicore’s efforts to expand in Europe’s battery value chain. However, the fallout has delayed market ramp-up and disrupted regional supply ambitions. The company expects flat battery materials performance to continue through 2025.

Germanium Business Shows Resilience

Meanwhile, Umicore’s electro-optic division saw modest growth, led by demand for germanium-based products in aerospace and electronics. In addition, the firm benefited from recycling demand through its closed-loop germanium refining services. To strengthen feedstock security, Umicore partnered with STL, a subsidiary of Gecamines in the Democratic Republic of Congo. Shipments from the Big Hills Tailing site began in January and are expected to continue monthly, supporting Umicore’s supply diversification.

The Metalnomist Commentary

Umicore’s performance in 2024 highlights the growing vulnerability of Europe’s battery ambitions. The collapse of Northvolt is a cautionary tale, exposing weaknesses in upstream coordination. While setbacks continue in battery materials, Umicore’s pivot to strategic germanium sourcing may offer short-term stability.

 

Umicore Cuts €800mn in Capex for Battery Materials Amid EV Slowdown

Umicore

Belgian firm halves investment in pCAM and CAM to adjust to changing battery market dynamics

Umicore Reduces Battery Segment Capex to €800mn Through 2028

Umicore will cut its capital expenditure for battery materials solutions to €800mn between 2025 and 2028. The company previously committed €1.6bn but paused expansion plans in Canada for pCAM and CAM projects. This decision reflects slower electric vehicle (EV) growth and falling segment revenues.

At its Capital Markets Day 2025, Umicore confirmed its focus on more selective investments. Around €500mn of the revised capex will be directed to facilities in Europe and South Korea. The company still targets increasing CAM capacity to 45 GWh/year by 2028, up from 30 GWh/year today.

Canadian Battery Project on Hold as Market Cools

In 2023, Umicore announced a $2.1bn investment in Canada, including $1.8bn in capex for a battery materials site. However, weaker EV sales have prompted a strategic reassessment of capital deployment. The current pCAM production capacity remains at 80,000 metric tonnes annually.

Revenue from the battery segment dropped 30% to €386mn in the latest report. Slowing demand in Europe, coupled with a broader global deceleration in EV sales, drove this decline. Meanwhile, Umicore continues to explore cost-efficient growth in regions with stable market demand.

Shifting Priorities and Regional Focus

The company will prioritize mature markets like Europe and South Korea for near-term battery material investments. While Canadian plans are deferred, Umicore aims to sustain technological leadership through optimization and targeted expansion. This strategic pivot reflects broader trends as battery producers recalibrate amid uncertain demand.

The Metalnomist Commentary

Umicore’s capex cut signals caution across the battery supply chain as EV hype meets market reality. Prioritizing selective regional growth may offer stability while global demand resets post-2024 surge expectations.

DRC Miner Gecamines Set to Ship First Germanium Concentrates Amid Tight Global Supply

Gecamines

The Democratic Republic of Congo’s (DRC) state-owned mining company, Gécamines, is poised to make its first-ever shipment of germanium concentrates, marking a significant milestone in the global supply chain for this critical mineral. The shipment will be exported to Umicore, a Belgian metals processor, for refining into high-tech downstream products.

A Strategic Move Amid a Global Germanium Crunch

Gécamines’ germanium concentrates are sourced from the Big Hill tailings site in Lubumbashi, a location that holds approximately 10 million tonnes of metal slag. The tailings contain valuable recoverable metals such as zinc, silver, cobalt, and copper, alongside germanium.

The company’s subsidiary, STL, recently established a state-of-the-art hydrometallurgical plant at Lubumbashi to process these tailings. This partnership with Umicore, formalized in May, involves both technological collaboration and an offtake agreement, ensuring a streamlined supply of germanium for the Belgian company.

This development is particularly significant as global germanium availability has been constrained since China, the world’s leading producer, introduced export controls in August 2023. As a result, China’s germanium exports dropped by 56% year-on-year between January and July 2024, totaling just 15,277 kilograms.

Market Dynamics: Rising Demand and Tight Supply

Germanium, a vital mineral for high-tech industries such as semiconductors, fiber optics, and infrared optics, has seen skyrocketing demand. The supply restrictions, coupled with China’s national stockpiling efforts and reduced feedstock from domestic zinc and lead mines, have caused a global supply crunch. Prices for germanium surged dramatically during the summer of 2024, underscoring the urgency for alternative sources.

The shipment from Gécamines and its collaboration with Umicore signals a shift towards diversified germanium sourcing, which could help stabilize the market. By leveraging its Big Hill reserves, the DRC could emerge as a significant player in the critical minerals sector.

Chile Lithium Exports Remain Flat in 1Q Despite Asian Rebound

Chile Lithium

European Slowdown Offsets March Recovery

Chile’s lithium exports stayed flat in the first quarter of 2025, totaling 67,200 metric tonnes of lithium salts. This matched the previous quarter, though it was 11.2% higher than the same period in 2024.

The stagnation stemmed from weak February volumes caused by soft demand in Europe and oversupply in China. LCE exports in February plunged 25% below the six-month average to 16,700t amid China’s ample inventories.

However, March brought a rebound as Asian buying resumed. Chile exported 23,000t in March alone, up 37% from February levels.

Global Trade Dynamics Reshape Demand Landscape

Belgium, once a key buyer, cut its imports by 67% year-on-year. This followed Umicore’s decision to halve cathode output in 2025 due to a 30% drop in battery material sales.

Meanwhile, China reclaimed its role as the dominant importer, accounting for 72% of Chilean lithium exports. South Korea also boosted its intake by 21%, importing 11,400t in the quarter — partly filling the gap left by Europe.

With US tariffs on Chinese battery packs nearing 200%, South Korea and Japan may gain favor in the US supply chain. This shift could raise their demand for Chilean lithium in coming months.

Uncertainty Clouds Outlook Despite Rising Production Targets

Chile aims to produce 305,000t of LCE in 2025, up 16% from last year, according to Cochilco. Yet, current export volumes suggest a 36,000t shortfall unless demand surges later this year.

The evolving global trade policy — especially under the Trump administration — may further disrupt Chile’s lithium trade. Producers face the challenge of aligning rising production with increasingly fragmented global demand.

The Metalnomist Commentary

The flat start to 2025 shows how vulnerable Chile’s lithium sector is to global policy shifts and EV market volatility. While Asia provides a buffer, Europe’s retreat and US tariffs create strategic uncertainty. Producers like SQM and Albemarle must now navigate not just markets — but geopolitics.

China's GEM Increases Battery Material Sales in 1H

Sales Surge Driven by Full Capacity

Green Eco-Manufacture (GEM), a leading Chinese cobalt refiner and lithium cathode active material (CAM) precursor producer, reported a significant increase in sales of CAM precursors, cobalt, and nickel for the first half of the year. The company attributed this rise to full capacity operations across its main product lines.

GEM's sales of ternary precursors, including lithium nickel-cobalt-manganese (NCM) and lithium nickel-cobalt-aluminium (NCA), surged by 45% year-on-year to exceed 100,000 tons. The firm also experienced a remarkable 133% increase in ternary CAM sales, reaching 7,119 tons.

Expansion and Strategic Partnerships

In August, GEM secured a supply agreement with South Korean lithium-ion battery CAM manufacturer Ecopro for 265,000 tons of ternary precursors from 2025 to 2028. The company is also expanding its production capabilities, with a new 50,000 tons per year ternary precursor plant in Indonesia set to start operations in the latter half of this year.

GEM's cobalt tetroxide sales soared by 163% year-on-year to 10,500 tons, driven by higher demand from the consumer electronics sector. The company sources cobalt from long-term contracts with Switzerland-based Glencore and from its mixed hydroxide precipitate (MHP) projects in Indonesia.

Nickel Production and Cost Reduction Goals

GEM's nickel MHP shipments from its QMB project in Indonesia doubled to over 20,000 tons nickel metal equivalent during January-June, with a full capacity rate. The firm plans to expand its nickel smelting capacity to 150,000 tons per year by year-end and aims to ship 60,000 tons of MHP in 2024. GEM also targets reducing MHP smelting costs to $7,500 per ton by the end of the year, benefiting from decreased sulfuric acid costs.

The company is involved in recycling power batteries, cobalt, nickel, and tungsten scrap, with recycled cobalt shipments reaching 8,987 tons and power battery recycling up by 37% to 16,300 tons or 1.84 GWh in the first half of the year.

GEM serves a global client base, including South Korean firms like Ecopro, Samsung SDI, SK On, and LGC, Chinese companies such as XTC New Energy Materials and BYD, as well as international entities like Umicore, Sandvik, and Kennametal.

Vulcan Energy Resources Starts Lithium Hydroxide Production at German Demonstration Plant

Vulcan Energy Resources

Lithium and geothermal group Vulcan Energy Resources has begun production of lithium hydroxide at its demonstration plant in Frankfurt, aiming for commercial production by 2027. This represents a two-year delay from its original timeline but positions Vulcan as a leader in carbon-neutral lithium extraction and processing.

From Pilot Production to Commercial Goals

Vulcan first started producing lithium chloride at its pilot extraction plant on April 8, 2024, and on December 21, initiated lithium hydroxide production using lithium chloride as feedstock. The demonstration plant has a capacity of 55 tonnes per year (t/yr), sufficient for regulatory compliance across at least three of the four required stages before commercial-scale operations commence.

The company plans to supply lithium hydroxide to key partners, including LG Energy Solutions, Umicore, Stellantis, Renault, and Volkswagen. As part of Phase 1 production, Vulcan aims to deliver 24,000 t/yr of lithium carbonate equivalent (LCE), enough for around 480,000 electric vehicles (EVs) annually, assuming an average EV battery capacity of 50kWh.

Low-Carbon Lithium Production with Geothermal Power

Vulcan employs direct lithium extraction (DLE) technology at its plant in the Upper Rhine Valley, achieving up to 95% efficiency — far higher than the 40-60% typical of traditional methods. By using geothermal brine to power extraction, the company eliminates fossil fuels from its processes, claiming the lowest carbon footprint in the global lithium production industry.

According to Cris Moreno, Vulcan’s CEO, the integrated upstream and downstream operations will produce lithium hydroxide without reliance on fossil fuels. "This allows us to provide affordable baseload heat and power, offering a sustainable and economically viable alternative," Moreno stated.

Challenges and Opportunities

Although Vulcan has twice delayed its commercial production schedule, its innovative approach to lithium extraction aligns with growing demand for sustainable materials in the EV market. Vulcan plans to create at least 1,300 direct and 1,500 indirect jobs upon reaching Phase 1 capacity.

However, the company has yet to complete a definitive feasibility study for Phase 2, which will further expand production and meet growing demand from global automakers and battery manufacturers.

Global Germanium Demand Soars as Buyers Seek New Supply and Alternatives

The U.S. Department of Defense (DoD)

With rising demand for germanium in defense and advanced computing, global consumers are seeking alternatives as China’s export restrictions have tightened supply. Germanium’s applications in artificial intelligence (AI) and autonomous vehicles have driven increased consumption, especially for its use in high-performance computing and infrared optics. AI systems benefit from silicon-germanium's ability to operate at higher frequencies and lower power, making it critical in modern technological advancements.

Germanium Supply Chain Concerns and Strategic Moves

The U.S. Department of Defense (DoD) is actively working to secure a sustainable germanium supply. The DoD has teamed up with LightPath Technologies to replace germanium in some of its applications, especially in optics, in a bid to reduce supply chain vulnerabilities. Meanwhile, other initiatives focus on increasing germanium consumption for defense purposes. The DoD is investing $14.4 million in 5N Plus, a Canadian semiconductor materials firm, to expand its capacity for producing germanium wafers for solar cells, ensuring continued supply for defense and satellite industries.

Producers are also responding to the supply crunch. Companies in Australia and Canada are exploring germanium-rich mining projects, while Hong Kong Sinomine Rare Metals is pushing to commercialize germanium production at its copper smelting line in Namibia. Belgium’s Umicore, meanwhile, has secured a deal with STL1 in the Democratic Republic of Congo to optimize domestic refining of germanium, further diversifying its global supply.

The rising price of germanium is likely to drive more refining and recycling initiatives, unless alternative materials become more widely adopted in its key applications.

US Sovereign Fund Could Boost Critical Minerals Investment, Says Ivanhoe Chief

Ivanhoe Mines

Long-term mine value undervalued in Western models, new funding approach may unlock investment in extended-lifecycle projects.

Ivanhoe Mines founder and executive co-chairman Robert Friedland urged the creation of a US sovereign wealth fund to support the critical minerals supply chain, arguing it could encourage deeper and longer-term investment in mining. Speaking at the CERAWeek by S&P Global conference, Friedland said traditional net present value (NPV) models fail to reflect the true economic potential of century-long mine lifespans.

Financial Models Discourage Long-Term Mining

"NPV models make mining look poor beyond 10 years," Friedland stated. He noted that discounting future cash flows leaves "almost nothing" of value after the first decade, despite mines often running far longer.

Shaun Usmar, CEO of Vale Base Metals, agreed, stressing that the industry regularly underestimates asset longevity. "We statistically undervalue the upside of mines extended two to three times their original life," he said.

This short-term financial lens causes many Western mining firms to overlook long-duration, high-reward mineral projects, especially in strategic supply chains for clean energy technologies.

US Government Eyes Policy and Project Support

Efforts to fix this gap are already underway. The US Export-Import Bank’s Supply Chain Resilience Initiative now provides financing for international critical mineral projects, contingent on long-term offtake agreements with US companies.

Moreover, Laura Lochman, acting assistant secretary at the US Bureau of Energy Resources, highlighted Washington’s role in coordinating global partnerships. She cited a recent collaboration between Umicore (Belgium) and Gecamines (Democratic Republic of Congo) on a germanium project as a model for future deals.

"Our job is to connect capable players and accelerate execution," Lochman said.

Vulcan Frankfurt LiOH processing plant secures key permit in Germany

Vulcan Energy Resources

The Vulcan Frankfurt LiOH processing plant has cleared a major regulatory hurdle with its new German construction permit. The 24,000 t/yr lithium hydroxide monohydrate facility will sit in Frankfurt and anchor Vulcan’s European battery strategy. As a result, the Vulcan Frankfurt LiOH processing plant moves closer to supplying regional cathode and EV manufacturers with local low-carbon lithium.

Vulcan plans to fund the Vulcan Frankfurt LiOH processing plant during July–December 2025. However, the company must raise sufficient capital by 31 December to retain €104mn in German government grants awarded in late July. This deadline adds urgency to financing discussions and underscores Berlin’s support for EU battery value chains. Vulcan will feed the plant with lithium chloride from its Landau extraction project in southwest Germany, creating an integrated domestic supply route.

Offtake-backed model underpins Vulcan’s project financing

Long term offtake contracts provide a strong commercial base for the Vulcan Frankfurt LiOH processing plant. Vulcan has committed 182,000t of LiOH over ten years to LG Energy Solutions, Umicore and Stellantis. Therefore, a significant portion of future output is already locked into Tier-1 battery and automotive customers.

In addition, Vulcan is negotiating a fourth offtake deal it expects to sign by year end. This additional contract should further support project finance discussions with lenders and strategic investors. Meanwhile, Stellantis has already backed the Frankfurt plant through a $50mn equity investment in 2022, becoming Vulcan’s second-largest shareholder. This mix of offtake, strategic capital and grants gives the project a diversified funding stack.

Frankfurt LiOH plant targets 2027 start within EU battery buildout

Project timelines show how the Vulcan Frankfurt LiOH processing plant fits into Europe’s broader battery expansion. Vulcan began producing LiOH at a Frankfurt demonstration plant in November 2024 to de-risk technology and qualification. The company now targets commercial production at the full-scale facility in 2027, subject to successful financing.

Meanwhile, the integrated Landau–Frankfurt flow sheet aims to deliver lower-carbon lithium to EU customers. This is increasingly important as battery passports, ESG scoring and local content rules shape sourcing decisions. Therefore, the Vulcan Frankfurt LiOH processing plant could become a flagship European lithium hub if execution stays on track.

The Metalnomist Commentary

Vulcan’s progress confirms that offtake-backed lithium chemicals projects with strong policy support remain bankable, even in a volatile capital market. The key test now is whether Vulcan can close funding in time to secure German grants and hit its 2027 start date. For cathode producers and OEMs, Frankfurt’s eventual ramp-up will be a critical signal for how fast Europe can localise strategic lithium chemicals.