Umicore, the Belgian chemical company, experienced a significant boost in its shares following an announcement that the Canadian and Ontario governments will provide funding for its new battery-materials production plant. The news exceeded analysts' expectations and will result in reduced costs for Umicore.

As of 0745 GMT, Umicore shares were trading 15% higher at EUR25.60, reflecting the positive response to the funding announcement.

Umicore revealed that it plans to invest a total of 690 million euros ($728.7 million) until 2026 in its facility located in Loyalist, Ontario. This investment includes non-refundable capital expense grants. In addition to the company's investment, there will also be government subsidies, bringing the overall investment to a substantial sum of EUR1.27 billion.

Analysts at Citi were pleasantly surprised by the level of non-refundable capex grants offered by the Canadian and Ontario governments. In a note to clients, they stated that the public funding of EUR580 million exceeded their estimate of approximately EUR350 million.

Umicore's new plant in Ontario will be used as a strategic platform to target the North American market for electric-vehicle batteries. The company has further plans to potentially invest up to EUR500 million by the end of the decade, and if approved, this additional investment would result in extra public funding of around EUR200 million.

It is evident that Umicore's partnership with the Canadian and Ontario governments will not only provide financial support but also open doors to significant growth opportunities.

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