Resumption of LG Energy Solution's JV in Canada gets green light

South Korea’s LG Energy Solution Ltd. has received the green light to resume construction of an electric-vehicle battery joint venture in Canada with multinational carmaker Stellantis N.V.

This is thanks to the Canadian province of Ontario's reversal of its refusal to provide subsidies for the project.

Reuters on Sunday said Ontario Premier Doug Ford on Friday to reporters pledged more money for the NextStar facility and “saving jobs and giving people the quality of life they deserve in southwestern Ontario.”

This was a retreat from his hardline stance of leaving it up to the federal government to allow the resumption of construction.

LG and Stellantis agreed to build the plant by investing $4 billion (5.3 trillion won) in Windsor, Ontario, and were building infrastructure. Both sides, however, announced a suspension of the project on May 15 after talks  broke down with the Canadian government on the scale of subsidies.

Ottawa pressured the province to end the gridlock if Ontario pays its fair share.

The province's expressed  intention to provide subsidies has raised the possibility of the project’s resumption.

Minister of Innovation, Science and Industry Francois-Philippe Champagne said Ford’s comments are a sign of progress toward reaching an agreement.

“We see signs of a solution to the problem,” an LG source added. 

Write to Nan-Sae Bin at binthere@hankyung.com