The mining giant founded by Australia's richest man is buying the battery and technology arm of the Williams Formula One racing team for $222.2m (£164m).
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Fortescue Metals will purchase UK-based Williams Advanced Engineering from private equity firm EMK Capital and Williams Grand Prix Engineering.
The deal is aimed to help the iron ore producer achieve its target to be carbon neutral by 2030.
One of the first projects to be developed will be a battery train.
"This announcement is the key to unlocking the formula for removing fossil-fuel powered machinery and replacing it with zero carbon emission technology," Fortescue's founder and chairman, Andrew Forrest, said in a statement.
Mr Forrest, who has an estimated net worth of more than $18bn (£13.3bn), is known for investing in sustainable energy projects.
Under the deal, Oxfordshire-based Williams Advanced Engineering (WAE) will be integrated into the Fortescue's clean energy unit.
The Perth-based miner said it plans to use WAE's battery technology to power its freight trains, heavy industrial equipment and haulage trucks.
Fortescue has been developing a prototype battery for heavy industrial use since early last year.
Over the next decade, Mr Forrest aims to transform the world's fourth-biggest iron ore producer into one of the world's leading clean energy producers.