May 24 2019
On May 23rd, 2019, Umicore has reported that it has decided to buy Freeport Cobalt’s cobalt refining and cathode precursor activities in Kokkola, Finland, for a total payment of $150 million on a debt and cash free basis, including the value of the working capital to be taken over at closing, which was nearly $40 million at the end of March.
Based on the customary closing conditions, with regulatory approvals, the transaction is anticipated to be finalized by the end of 2019 and will receive funds from current credit facilities of Umicore. The acquisition is expected to be earnings accretive from 2020 and value accretive from 2021, following the integration process completion and a considerable decrease in the overall working capital incurred as a result of supply chain synergies.
Umicore does not acquire activities of the cobalt fine powders, catalysts, chemicals, pigments, and ceramics situated on the same site. These activities will be carried out by Freeport Cobalt as usual.
Acquiring the Kokkola refinery and cathode precursor production marked an important milestone in the extension of Umicore’s battery materials value chain. Having R&D, precursor production, refining, battery recycling operations, and cathode material production situated in Europe, Umicore is perfectly positioned to serve the operations of its battery cell and automotive customers with a supply chain of fully integrated, sustainable, and local battery materials in Europe. Umicore will play a significant role in the European Union’s plans to develop a competitive and sustainable battery ecosystem in Europe using this European battery materials supply chain.
Europe’s largest cobalt refinery is the advanced Kokkola refinery. Its refining and precursor capability perfectly complements that of Umicore. The skill and experience of 250 employees of Umicore are highly acknowledged in the battery materials industry. The acquired operations will provide precursors for the production of cathode materials in Nysa, Poland, which is expected to commence in the second part of 2020.
Through Umicore’s extended agreements, the refinery in Kokkola will be provided with cobalt raw materials obtained solely from high-performance industrial-scale cobalt mining operations, which operate in complete agreement with Umicore’s sustainable procurement framework for cobalt. These agreements will meet Umicore’s approach to distinguish its offer by confirming to its customers that its products do not include any artisanally mined cobalt units and do not involve any child labor.
This acquisition underlines our commitment to support the rapid growth of our battery materials customers in Europe and supply them with locally produced materials of the highest quality with a certified and clean origin. I am proud of Umicore’s contribution to the accelerating transition to cleaner mobility in Europe and the rest of the world.
Marc Grynberg, CEO, Umicore