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Glencore Update

The mining group Glencore acquired shares in Britishvolt, a battery start-up company behind which the ambitious Gigafactory plan aims to equip the British automotive industry with the future of electric vehicles.

As part of the agreement, Glencore will also supply cobalt, a raw material for batteries, to a super factory built in Northumberland.

The strategic partnership is by far the most high-profile recognition of the UK’s first super factory. Supporters say the project is worth £2.6 billion. This will be vital if the country is to cultivate a local electric vehicle industry, and it will also help. To enable the government to achieve its carbon emission reduction targets.

With the UK banning the sale of gasoline and diesel cars from 2030, the auto industry is under pressure to build infrastructure (including battery supply) to produce electric cars on a large scale and protect jobs.

“From the perspective of Britishvolt, this is an important milestone to ensure that raw materials are produced in a responsible manner to help reduce project risk,” said Orral Nadjari, the CEO and founder of Britishvolt and a former investment banker. “If you look at global cobalt production, two companies stand out-Glencore and China.”

The FTSE 100 index company did not disclose the scale of its investment in Britishvolt, but it will become one of the startup’s largest strategic supporters. Founded in 2019, Britishvolt has won the support of investors in the Middle East and Scandinavia.

As the world’s largest cobalt producer, Glencore will supply 30% of the metal used by Britishvolt from 2024 to 2030. Its use in the booming electric vehicle industry makes cobalt one of the most popular raw materials in the world.

Glencore has supplied metals from mines in the Democratic Republic of Congo and Australia to BMW and Tesla. Tesla has been working with Glencore and other miners to develop a blockchain platform to ensure that cobalt is produced in an ethical manner in the Democratic Republic of Congo.

At the time of this investment, Britishvolt is one of the few battery factories in Europe to obtain planning permission. The company is considering whether to list in London or New York through a merger with a special purpose acquisition company.

The company said its factory will be built on the site of a decommissioned coal-fired power station in Bryce, north-east England, and will initially employ 1,000 employees. Once the super factory is fully operational, the labor force will climb to more than 3,000, which is a boon for one of the poorer regions of the UK.

Britishvolt chose this 93-hectare plot because it has access to a deep sea port and is connected to the power grid. The target capacity of the super factory is 30 GWh/year, which is enough to meet the annual demand for 300,000 battery packs. The first production is expected at the end of 2023. In contrast, Tesla’s Gigafactory in Nevada has a capacity of approximately 37 GWh.

Six companies are negotiating It is related to the British government’s establishment of a battery super factory, but only Britishvolt and Nissan, which are still testing its chemical composition, have publicly announced their plans.

The weight of the battery means that car manufacturers usually want their production locations close to where the rest of the car is manufactured, which means that facilities in the UK are needed to sustain the production of companies such as Land Rover and Mini.

In contrast, gasoline and diesel engines manufactured in one place are usually shipped around the world before being installed on cars on assembly lines.

David Brocas, Glencore’s chief cobalt trader, welcomed the deal with Britishvolt. “As mobility and the energy transition accelerate, the forecasted demand for future-oriented metals is also accelerating,” he said.

Additional reporting by Henry Sanderson

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