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Data: Rystad Energy; Chart: Baidi Wang/Axios

Global dependence on cobalt is rising, even as tech giants from Apple to Tesla pledge to rid their batteries of the stuff given its ties to child labor.

Why it matters: Cobalt is used for EVs,  battery backups, cellphones — a range of consumer products we all use. The insatiable demand for these products — plus the lack of a ready replacement for cobalt — has entirely outstripped efforts to do something about the human rights concerns.

Catch up fast: The Democratic Republic of Congo supplies 70% of the world's cobalt. Mining operations there are intertwined with child labor, particularly at small "artisanal" mines. 

That's prompted high-profile news investigations; a human-rights lawsuit against Apple, Google, Dell, Microsoft and Tesla; and broad calls for tech companies to eliminate their use of cobalt.

Details: The DRC will continue to hold a "dominating position" in cobalt through about 2030, Susan Zou, battery materials analyst at Rystad Energy, tells Alan. 

What's next: Government policies aimed at reducing cobalt dependence, combined with efforts to phase out the material and ramp up recycling, may finally slow cobalt demand by about 2030.

But, for now: Cobalt mining in the DRC is consolidating around four conglomerates, which are pushing out the small miners that have developed the worst child-labor records.

“By 2025, over half of the production share of cobalt mined in the DRC...will be concentrated in the hands of four miners: CMOC, Glencore, ERG and Chemaf," according to Rystad Energy. 

The major driver behind the production: EVs and demand from China.

"More than 80% of the cobalt mined in the DRC is exported to China, which is the world’s largest producer and consumer of refined cobalt used in EV batteries," says FTI Consulting managing director Bertrand Troiano.

1 big thing: Cobalt dependence increasing

Circ, an apparel recycling startup, raised $30 million in Series B funding from Breakthrough Energy Ventures and Inditex, the parent company for clothing maker Zara, Megan reports.

Why it's the BFD: Companies such as Inditex are taking a page out of the venture capital playbook by investing in mid- and early-stage climate-related startups, a trend that both puts them in competition with the investors and creates an added pool of capital to pull from if you're an entrepreneur seeking funding.  

Details: Breakthrough Energy Ventures will get a board seat as part of the all-equity deal, which closed in June.

Circ president Pete Majeranowski declined to disclose the round's valuation.

Flashback: Circ survived — though barely — the Cleantech 1.0 bust as a biofuels company before pivoting its hydrothermal extraction technology to apparel recycling.

How it works: Majeranowski says Circ is essentially a textile commodities provider.

Circ's Virginia-based factory takes old garments, shreds the fabric, treats it, and then uses what he calls a "fancy pressure cooker" to depolymerize the fabric and separate it from any other materials such as cotton, which it can separately treat and re-spin into useable textiles.

It sells the final textiles back to apparel makers like Patagonia. 

The intrigue: Majeranowski said that there was no definitive customer agreement in the deal with Inditex, a nearly $73 billion market-cap business that, in addition to Zara, owns several other apparel makers. 

He said it's something Circ is planning for "down the road" and that a partnership in the future is "implied" as a result of the round.

2. The BFD: Inditex-backed Circ nabs $30M

Illustration of a recycling symbol being stitched onto fabric.

💸 New early-stage climate-tech fund: Contrarian Ventures is reportedly planning a VC fund capped at €100m (~$101m) and has held a first closing, per Bloomberg.

The fund will focus on early-stage startups, with target investments of about €1.5m for 10%-15% ownership stakes. Contrarian's previous investments include H2Pro, PVcase and e-bike maker Zoomo.

🤝 A new "renewable energy major": Mainstream Renewable Power and Aker Offshore Wind this morning announced plans to merge, creating what Aker Horizons CEO Kristian Røkke called a "global renewable energy major."

The combined company will have a 27 GW portfolio of solar, land-based wind, and bottom-fixed and floating offshore wind projects.

📉 Rivian reportedly planning a 5% cut to workforce: The company is preparing to lay off hundreds of workers "in areas where the electric-vehicle maker has grown too quickly," Bloomberg reports, citing "people familiar with the matter."

A Rivian spokesperson declined to comment. The company has roughly doubled in size to about 14,000 employees, but it's been bedeviled by supply chain disruptions and shortages.

📈 Canoo notches big order from Walmart: The world's second-biggest retailer has reportedly signed a binding pre-order for 4,500 of Canoo's all-electric delivery vehicles, per TechCrunch.

Canoo, which went public via SPAC in 2020, warned last quarter that it might not have enough money to stay in business. It also came under SEC investigation last year.

Of note: Canoo in November announced plans to relocate its HQ to Arkansas — also home base for Walmart.

🇪🇺 Is Europe really backsliding on climate?: Not by much, says Akshat Rathi in his column today for Bloomberg Green.

Key quote, from Oliver Sartor of the German think tank Agora Energiewende: "Regardless of short-term increases in coal in the power market, the overall total emissions should still be reduced by the combination of energy efficiency, renewable deployment and other measures."

😮 Pale blue dot: NASA yesterday released its first, breathtaking image from the James Webb Telescope.

"The image covers a patch of sky approximately the size of a grain of sand held at arm’s length by someone on the ground — and reveals thousands of galaxies in a tiny sliver of vast universe."

3. 🌡️ Temperature check

Illustration of three emojis: a thermometer, a hot face, and a cold face.

• Nexii Building Solutions, a low-carbon building materials manufacturer, announced a $45m CAD (~$35m USD) investment led by Horizon Technology Finance (Nasdaq: HRZN) and Trinity Capital (Nasdaq: TRIN). 🦄🦄 The company says it's now valued at $2b. http://axios.link/A2Lp 

• SK Innovation, an energy subsidiary of SK Group, has completed a $20m equity investment in Fulcrum BioEnergy, which is developing renewable, drop-in transportation fuels from landfill waste. http://axios.link/zl5I 

• Micropep, a French ag-tech startup developing more sustainable crop protection sprays, has completed an €8.75m (~$8.8m) Series A1 financing round led by Fall Line Capital. Existing investors Supernova Invest, Sofinnova Partners, FMC Ventures and IRDI/SORIDEC participated. http://axios.link/Dd7b 

• SiTration, an MIT spinoff developing separation processes for materials extraction, raised $2.35m in pre-seed funding led by Azolla Ventures. The E14 Fund, affiliated with MIT, participated. http://axios.link/O021 

• Thor Industries (NYSE: THO) announced an investment in Dragonfly Energy, a deep-cycle lithium-ion battery producer for RVs. Dragonfly in May announced an agreement to go public via SPAC, valued at $500m. http://axios.link/ycjW

• Edison Partners announced its exit from portfolio company Budderfly, in which Partners Group (SIX: PGHN) acquired a majority stake. Our coverage of Partners' investment in Budderfly. http://axios.link/Em06 

• Foresight Group (LSE: FTSV), a British private equity firm, agreed to acquire Australia’s Infrastructure Capital Holdings for up to $140m AUD (~$94.7m USD). http://axios.link/cZnU 

• Equinor has signed an agreement to acquire East Point Energy, a Charlottesville, Virginia-based battery storage developer. http://axios.link/stHP 

• Tallgrass and Kanin Energy announced an agreement to jointly develop four waste-heat-to-power energy projects with an installed capacity of more than 48 MW. We spoke with Kanin CEO Janice Tran in April.  http://axios.link/utkj 

• NextChem has entered a contract with Storengy to spearhead an advanced basic engineering study for a waste-wood and solid recovered fuel conversion plant to produce biomethane. http://axios.link/jc9L 

• Zoomo, a developer of last-mile-delivery EVs, and SG Fleet (ASX: SGF), an Australia-based mobility company, announced a partnership targeting parcel delivery companies. http://axios.link/qz7i 

• Paragon Energy Solutions, a developer of safety-related parts and components for the nuclear energy industry, has signed a patent license agreement with NuScale Power. http://axios.link/0XmW 

• Electreon (TASE: ELWS.TA), a developer of wireless and in-road-wireless EV charging for commercial and passenger vehicles, has signed an MOU to sell its wireless EV charging services to CTG, a limousine and shuttle-services operator in New York and Las Vegas. http://axios.link/LztO 

4. Hot deals

• PBC, a developer of renewable drinking water technology, has appointed David Crane to its board of directors. Crane was president and CEO of NRG Energy from 2003-2015. http://axios.link/HoR2 

• Leeward Renewable Energy has named Greg Hazelton as CFO. Hazelton was previously executive vice president and CFO of Hawaiian Electric Industries. http://axios.link/C7ZF 

• Advanced Cell Engineering, a Florida-based developer of lithium-ion battery cell technology for EV batteries, has hired Tom Madden as CTO. Madden was previously principle at Madden Echem Consulting. http://axios.link/E7sw 

• Kore Power has named Ravi Shanker as a senior advisor to CEO Lindsay Gorrill. Shanker was previously serving as founding president and CEO of DowKokam

• Cummins (NYSE: CMI) announced the election of Gary Belske to its board of directors. Belske was previously deputy managing partner and COO at Ernst & Young before retiring in 2016. http://axios.link/er8M 

• Core Electric Cooperative, a not-for-profit electric distribution cooperative in Colorado, has hired Stephen Figueroa as commercial operations director. Figueroa was previously managing partner at FMS Capital. http://axios.link/P0RF 

• Troutman Pepper has hired Fredrick Wilson to join its Energy Practice Group in Washington, D.C., as a partner. Wilson was previously counsel with Davis Wright Tremaine. http://axios.link/K43u 

• Lordstown Motors (Nasdaq: RIDE) has named company president Edward Hightower as CEO and Daniel Ninivaggi as executive chairman of the board. http://axios.link/GcAA

• Lordstown Motors also named Donna Bell as executive vice president, product creation, engineering, and supply chain; Andrew Reyntjes as senior vice president, sales, service and marketing; Jill Coniglio-Kirk as vice president of people and culture; and chief commercial officer Jane Ritson-Parsons as an advisor. http://axios.link/GcAA

• Zeta Energy, a Texas-based battery developer, has named Michael Liedtke as chief commercial officer. Liedtke was previously vice president of business development for Maxwell Technologies. http://axios.link/yhYn

• Energize Ventures announced three new hires: Adam Katz as head of legal, Honour Masters as senior investment associate, and Hannah Magnuson as content marketing strategist. http://axios.link/IKdi

• Volta, the EV charging network, has appointed Michelle Kley as executive vice president, chief legal officer and corporate secretary. Klay was previously executive vice president, chief legal officer and secretary at Virgin Galactic Holdings. http://axios.link/zdcU 

• Volta has also named William Cooper as senior vice president, deputy general counsel and assistant secretary. Cooper was previously at the law firm Sidley Austin. http://axios.link/zdcU 

• Opal Fuels, a vertically integrated RNG producer and distributor, has appointed Todd Firestone as vice president of investor relations and corporate development. Firestone was previously a director at Evercore ISI. http://axios.link/Pnse 

• Benjamin Attia has joined BlackRock Sustainable Investing as research lead for energy, climate and sustainability. Attia was previously a principal research analyst at Wood Mackenzie. http://axios.link/QREa 

5. It's personnel

Final reminder! Tomorrow, Wednesday, July 13, we are hosting an Axios Pro exclusive conversation with Anthony Oni, managing partner and CEO of the Elevate Future Fund at Energy Impact Partners, and Dr. Eric Toone, Breakthrough Energy Ventures' Investment Committee technical lead. Sign up here.

🍝 The latest adventure in Megan's summer pasta saga was a lemony ricotta pasta with more fresh basil and spinach. 10/10

👶🏼 Alan was so tired after the wedding this weekend that he tried putting the dog's harness on the baby — and spent a good 15 seconds trying to figure out why it was so big around her legs.

Thanks for reading Climate Deals! Please share with your friends, family and sustainable fashionistas.

July 12, 2022

1 big thing: Cobalt dependence increasing