Major economic impact from cathode material plant projects
An updated evaluation of regional economic impact shows that the cathode material production plants to be built in Hamina and Kotka will have a significant impact on the regional economy of Kymenlaakso and on the Finnish economy as a whole.
14. October 2022
The regional economic analysis of the plant projects evaluated the direct economic impact for the Kymenlaakso region, the multiplier effects of production activities and the multiplier effects of the planned activities in Finland as a whole from the precursor active cathode material (pCAM) plant planned to be built in Hamina and the cathode active material (CAM) plant planned to be built in Kotka.
The baseline data for the analysis built on 60,000 tonnes annual production of pCAM and 50,000 tonnes of CAM. This corresponds to approximately 32 GWh of annual battery production capacity, which is sufficient for roughly 640,000 full-electric cars per year.
The economic impact was analysed separately for two phases – construction and production. The impact on national economy from the construction phase is temporary, whereas the completed plants will bring on a structural change. In both cases, the initial data for modelling is based on the price level and costs for 2022.
The employment impact of construction is more than 9,100 person-years
The investments required for the construction of both battery material production plants total approximately one billion euros. In addition to the production plant investments, the projects will bring investments worth approximately EUR 150 million across the construction project’s value chains.
All the impact generated during construction is new.
THE ECONOMIC IMPACT OF CONSTRUCTION
The plants expected to generate EUR 214 million in tax revenue annually when in operation
The battery material plants will have a long-term impact on the Finnish economy. The impact in GDP growth is estimated to be EUR 495 million at the national economy level. Once in operation, the plants will have new impact primarily on the services and industry sectors, which account for roughly 77 per cent of the new employment impact.
Data from stabilised annual operations were used as the basis for analysing the economic impact of the plants when in operation.
NEW ANNUAL ECONOMIC IMPACT OF THE PLANTS WHEN IN OPERATION
The production plants serve the development of carbon-neutral transport
SVP, Battery Value Chain at Finnish Minerals Group Vesa Koivisto highlights the importance of capturing the value add from refining the domestic minerals into battery materials. The impact generated by new industrial activity will affect all sectors of society.
“The production plant projects in Kymenlaakso put the strategy of Finnish Minerals Group into action. The aim that we have set with our project partners is the European market entry of battery materials with a low carbon footprint, which the manufacturers of lithium-ion batteries and electric cars can use to develop carbon-neutral transport in Europe. At the same time, the battery material production plants offer a unique opportunity to create new industrial activity that will bring jobs, increase know-how and generate tax revenue for society,” says Koivisto.
Koivisto says that, when implemented, the pCAM and CAM plants in the same region will bring benefits to both projects. For example, using the precursor cathode active material of Hamina’s pCAM plant in Kotka’s CAM plant would be a great value addition practice for Finland. The use of locally sourced raw material would also help lower the carbon footprint of the CAM plant’s cathode active material.
More information for the media
Vesa Koivisto, SVP, Finnish Minerals Group, firstname.lastname(at)mineralsgroup.fi, +358 50 453 6322
Key terms used in the text
Multiplier effects – the impact on production and consumption due to an increase in demand for goods, services and raw materials as a result of new projects.
Person-year – a unit of work done by a full-time person in a year.
Tax revenue – taxes generated by economic activity for society, such as taxes on products and production, as well as municipal, value added, corporate, property and income taxes.
Precursor material – preliminary stage of the cathode active material used in lithium-ion batteries. Also referred to as precursor cathode active material, or pCAM.
Cathode active material – a powdery end product used to manufacture cathodes, the most valuable part of the battery cell, in cell plants. Abbreviated as CAM.
The basic mission of Finnish Minerals Group is to responsibly maximise the value of Finnish minerals. We manage the state’s mining industry holdings and strive to develop the domestic value chain of lithium-ion batteries. Through our work, we contribute to Europe moving towards electric transport and a more sustainable future. www.mineralsgroup.fi