Glencore stake boosts Britishvolt’s £4bn plans for battery factory
Mining giant Glencore has agreed to buy a stake in
Britishvolt, the startup with plans to invest £4bn building the UK’s first
large-scale battery factory to help accelerate the rollout of electric
vehicles.
Glencore said it had made an undisclosed investment in the
company as part of a long-term strategic partnership with Britishvolt to supply
cobalt to its pioneering battery “gigafactory” in Northumberland.
Glencore is one of the world’s biggest producers of cobalt,
a byproduct of its copper mining in the Democratic Republic of Congo (DRC) and
its nickel mining in Australia and Canada. It is also a key material used in
manufacturing the batteries found in electric vehicles.
Britishvolt chief executive, Orral Nadjari, who founded the
company in 2019, said the partnership was “a huge step in the right direction”
which would help to lock in its supply of cobalt and lower the risks for the
multibillion pound project.
The former investment banker has already won backing from
investors in the Middle East and Scandinavia but Glencore is the first major
strategic investor to take a stake in the company.
Britishvolt’s battery factory is under construction on the
site of a decommissioned coal-fired power plant in Blyth in north-east England
where it will initially employ 1,000 people, rising to 3,000 once the gigafactory
is at full capacity.
Once complete Britishvolt expects the plant to produce
enough battery cells for about 300,000 electric vehicle battery packs a year,
which will mainly supply the UK’s automotive industry.
David Brocas, Glencore’s head cobalt trader, said the
miner’s commitment to supporting Britishvolt was key to underpinning the
long-term cobalt supply deal.
“As the mobility and energy transition accelerates, so does
future demand for battery metals such as cobalt, copper and nickel. Glencore is
already a leading producer and supplier of these metals, helping to underpin
our ambition of achieving net zero total emissions by 2050,” he said.
The deal is likely to reignite concerns over the ethical
procurement of cobalt to meet the world’s rising demand for electric vehicles,
and Glencore’s activities in the DRC.
Glencore is under investigation by authorities in the UK, US
and Switzerland, where the company is based, over alleged corruption. The UK’s
Serious Fraud Office in late 2019 opened an investigation into Glencore
relating to “suspicions of bribery in the conduct of business”. The company
also faces a criminal investigation by the Swiss government over its alleged
failure to prevent corruption in the DRC.
The company says it is working with Cobalt industry groups
in Congo, which produces 70% of the world’s supply, to improve transparency
around the production process, and progress ethical business practices and
standards.
Nadjari said: “Knowing that we are being supplied with
ethically produced, low-carbon cobalt is a signal to the market that we are
living by our values.
“This strategic partnership aligns perfectly with our
world-class ESG [environmental, social, and governance] principles, including
applying best practice wherever possible as well as assessing labour, human
rights and ethical procurement performance of our suppliers.”
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