Components for the new hybrid London black cab, designed by Chinese automaker Geely, will be manufactured at a factory in Bedwas, Wales, creating 130 local jobs.
Bedwas was transformed from a village into a colliery town in the 19th century. The last mines closed in 1984 and Bedwas has since tried to attract light industry to compensate for the loss of jobs.
The London Electric Vehicle Company (known as LEVC), which is owned by Geely, makes London black cabs and launched its new zero-emissions-capable TX model this year.
LEVC confirmed that Sapa Components UK, a subsidiary of Norwegian manufacturer Sapa, will build body parts for its European fleet.
Sapa will invest 9.6 million pounds ($13 million) on reopening its Bedwas plant, which closed in 2014.
The plant will make aluminum panels for the TX chassis, which will then be bonded at Geely's factory in Coventry, England. Aluminum is much lighter than steel, and aluminum vehicles are more fuel-efficient.
Sapa indicated that support from the Welsh government, including 550,000 pounds in funding, helped it select the Bedwas site over another European facility.
Welsh First Minister Carwyn Jones said: "The opening will create a range of new job opportunities and give a new lease of life to the area."
The deal will bring the estimated 130 new jobs to Caerphilly county, where Bedwas is located, during the next five years.
Hangzhou-based Geely acquired LEVC, formerly the London Taxi Co, in 2013 for 11 million pounds and has so far invested 325 million pounds in the business, including a 300 million pound facility in Coventry where the TX is assembled.
UK legislation stipulates that from Jan 1 all new London black cabs will need to be battery-powered.
LEVC is accepting orders from London drivers and will deliver 225 hybrid cabs to Dutch firm RMC at the start of 2018 under the first European export deal for the vehicles.
Geely plans to roll out the TX in Chinese cities in the coming years and is constructing a factory in China to manufacture the vehicle.
