Glencore to invest in, provide Britishvolt with long-term cobalt supply

Glencore has signed a strategic agreement with Britishvolt for the long-term supply of cobalt and has also invested an undisclosed amount for a stake in the upcoming UK battery maker.

The companies said Aug. 17 that Britishvolt was de-risking its operation by securing long-term supply of one of the key battery raw materials from Glencore.

A Britishvolt spokesman told S&P Global Platts that the supply would be for a minimum of 30% of the company's annual cobalt requirements.

The company declined to give the exact period of the long-term agreement, or how much of a stake Glencore had acquired through its investment.

Cobalt, a byproduct of copper and nickel mining, is one of the rarest and most expensive battery metals required for lithium-ion batteries.

Glencore is one of the largest producers of the metal, with ongoing operations at its Kamoto Copper Company in the Democratic Republic of Congo's Katanga province, and plans to restart its nearby Mutanda copper-cobalt mine in 2022.

With the increased focus on environmental, social, and governance (ESG) criteria in mining and business in general, Glencore has been promoting the sustainability of its cobalt operations, whether it be by the use of hydropower, recycling excess water to put overflows back into the processes, or supporting local communities.

Britishvolt said that investors were focused on ESG-linked investments and increasingly interested in the raw material sourcing strategies of battery makers, with the Glencore deal underscoring to the market that the company was delivering on its objectives.

The battery maker recently broke ground on its GBP2.6 billion ($3.6 billion) 30 GWh gigaplant in Blyth, Northumberland, which will be built in three phases of 10 GWh.

Production of battery cells is due to begin in the fourth quarter of 2023 and the plant should reach full capacity by the end of 2027 to manufacture enough cells for around 300,000 electric vehicles per year.

Britishvolt CEO Orral Nadjari said that by locking in supply from Glencore and de-risking the project, the company was taking a "huge step in the right direction" as it looked to accelerate the transition to a low carbon society.

"At the very heart of our business are our core ESG principles and commitments. Cobalt is a key ingredient in electric vehicle batteries and knowing that we are being supplied with responsibly produced cobalt is a signal to the market that we are living by our values," Nadjari said.

He added that Britishvolt's aim was to ensure that its supply chains were as ethical, low carbon and sustainable as possible.

Glencore head cobalt trader David Brocas said the miner's commitment to supporting its partners in meeting their requirements for essential battery ingredients was key to underpinning long-term supply agreements.

"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," Brocas said.