Glencore to source "clean cobalt" from Norway

The mining and raw materials trader Glencore (LON: GLEN) has signed a preliminary contract with the Norwegian battery manufacturer FREYR for the supply of 3,700 tons of cobalt metal in the form of cathodes from "ethical sources". The cobalt to be produced in the Swiss company's Nikkleverk facility in Norway will be a core component in FREYR's lithium-ion battery cells (LIB), which are to be produced in the planned facilities in the town of Mo i Rana. The supply agreement is based on a Memorandum of Understanding (MOU), which the companies signed in December and which includes joint research and development projects. This document outlined common steps to introduce blockchain technology, potential battery recycling, and collaboration on standards and traceability systems for artisanal cobalt mining. Glencore has also acquired an equity interest in FREYR through its merger with special purpose vehicle Alussa Energy (NYSE: ALUS). The combined company will be named FREYR Battery and its common stock is expected to start trading on the NYSE upon closing, which is expected in the second quarter of this year. "We look forward to helping FREYR achieve its goal of producing the world's lowest carbon batteries and contributing to our goal of reducing total emissions to zero by 2050," said Nico Paraskevas, director of copper and copper Cobalt marketing from Glencore. "Both companies recognize the importance of transparency in communication and ESG reporting and plan to work together to align relevant communication regarding the impact of business on the environment, carbon footprint, working conditions and human rights", FREYR CEO Tom Einar said in a separate statement. Currently, around 65% of the world's cobalt is mined in the Democratic Republic of the Congo, much of it by hand and with the help of children and young men. New cobalt mines outside the DCR could become the preferred source of ethically mined cobalt in the medium term. The announcement comes just weeks after the Swiss company announced an ambitious plan to achieve net zero emissions by 2050 by reducing its direct and indirect carbon footprint by 40% by 2035 compared to 2019 levels. Over the past three years, the mining and metals sectors have been increasingly scrutinized by host communities, end users and society in general, calling for a lower carbon footprint and transparent, ethical supply chains. Glencore, one of the largest coal producers in the world, also said it will focus on investing in metals that are considered "critical" in moving to a lower-carbon world. While the company found steam coal's share of the group's revenues fell from 25-40% to 10-15%, it said it doesn't think selling its coal mines would help reduce related emissions . The company has already made some concessions. In February last year, it promised to cap coal production, stop making coal acquisitions that would increase total production, and align its business strategy with Paris climate goals.