G&P, which is unlisted, said the U.K. generates 30,000 tonnes of domestic battery waste each year and less than two percent is collected for recycling. Most batteries end up in landfills.

The new plant is capable of processing up to 1,500 tonnes of waste alkaline and zinc carbon batteries each year.

"Non-lead acid batteries and in particular the more popular household batteries containing alkaline and zinc carbon chemistries, have a very poor recycling rate in the UK," G&P said in a statement.

But new European legislation, expected to come into force by mid-2006, will require Britain to treat 25 percent of waste portable batteries by 2012.

The plant will recover steel and black mass, a mixture of zinc, manganese and carbon. Black mass can be processed into zinc and manganese compounds or it can be refined into metal.

The company was looking for U.K. customers for the black mass, but it would initially be sold in Europe, G&P's managing director, Michael Green, told Reuters.

The value of the recycled product did not cover the cost of processing, but companies that had a strong waste management programme or wished to reduce their environmental impact to gain ISO accreditation were willing to pay for the service.

"There is a gate fee. The recycling fee is between 800 to 1,000 pounds ($1,538-1,993) per tonne, but that will fall as volumes increase. On top of that comes collection and sorting fees which vary," Green added.