By Rhiannon Hoyle
Australian miner Fortescue Metals Group Ltd. said it will buy a U.K. battery and electrification technology company for roughly $223 million as it seeks to slash carbon emissions from its mining operations and increase investment in clean energy.
Fortescue, the world's No. 4 producer of steel ingredient iron ore, said it has agreed to buy Williams Advanced Engineering, or WAE, from private equity firm EMK Capital and Williams Grand Prix Engineering Ltd.
"The acquisition of WAE provides critical technology and expertise in high-performance battery systems and electrification and will enable Fortescue to accelerate and support the decarbonization of Fortescue's mining operations as well as establishing an important new business growth opportunity," the miner said in a statement.
One of the first major projects slated for development is a battery electric train, said Fortescue, adding that it will announce further details on that plan early this year.
Fortescue has been working closely with WAE since early 2021 to design and build a prototype battery system that could power an electric mining haul truck. That will be a critical step in the decarbonization of Fortescue's mining haul fleet, said Fortescue.
Mining companies are racing to cut the emissions from their operations--and working with companies that buy their commodities to reduce their carbon footprint--fearing inaction could deter investors and customers amid a global transition to a low-carbon economy.
WAE--which has a history of working with the automotive and motorsports sectors and recorded unaudited revenue of roughly $84 million in 2021--will be managed via the miner's clean energy arm, Fortescue Future Industries, the company said.
"The potential global market for WAE is significant and will extend beyond the decarbonization of Fortescue, further demonstrating our commitment to the diversification of Fortescue to a renewable energy and resources company," said Fortescue Chief Executive Elizabeth Gaines.
Fortescue aims to become carbon-neutral by 2030. Meantime, its clean-energy arm has been signing agreements to develop green hydrogen and green ammonia projects worldwide.
The WAE acquisition will be funded from existing liquidity sources and is expected to be completed by the end of March, Fortescue said.
Write to Rhiannon Hoyle at email@example.com
(END) Dow Jones Newswires
January 23, 2022 17:26 ET (22:26 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.