Glencore (GLEN.L) has acquired a stake in UK battery start-up Britishvolt, backing the company's plans for the UK's first gigafactory.
The mining group did not reveal the amount it was investing in Britishvolt but it will be one of the biggest strategic backers of the start-up.
Glencore will also supply the $2.6bn (£1.88bn) gigafactory, which is being built in Northumberland, with cobalt — a vital raw material used in electric batteries. The company will supply 30% of Britishvolt's cobalt between 2024 and 2030 as part of the agreement.
The deal is a "major milestone" for the project, according to Orral Nadjari, Britishvolt’s chief executive and founder.
“From Britishvolt’s perspective this is a major milestone, securing responsibly produced raw materials to help de-risk the project,” Nadjari told the Financial Times. “If you look at global cobalt production two players stand out Glencore and the Chinese.”
Read more: Nissan announces £1bn UK ‘gigafactory’ plan
It comes amid a ban on the sale of new petrol and diesel cars by 2030 as the UK aims to reduce emissions of greenhouse gases to net zero by 2050.
Car firms and the UK government have been calling for the construction of electric battery gigafactories to support the production of electric vehicles, help meet carbon reduction targets, and protect jobs.
Britishvolt said that its factory will initially employ 1,000 workers. The number will rise to over 3,000 once the site is working at full capacity.
The start-up said it is expecting the gigafactory to go live with its first production at the end of 2023. The site is aiming for a capacity of 30 GWh/year, enough for 300,000 battery packs per year.
In July, Nissan (7201.T) announced plans for a £1bn gigafactory in Sunderland.
David Brocas, head cobalt trader for Glencore, welcomed the deal with Britishvolt, according to the FT. “As the mobility and energy transition accelerates, so does forecast demand for future facing metals,” he said.
Glencore's share price was down 1.24% on Tuesday morning.
Watch: Nissan paves the way for UK electric cars