Latest news with #CobaltHoldings
Reuters
3 days ago
- Business
- Reuters
Cobalt Holdings bets the battery metal's fortunes have turned: Andy Home
LONDON, May 29 (Reuters) - The price of cobalt has fallen so far over the last couple of years that even Congo's artisanal miners have given up on the battery metal. They have been swept aside by a wave of production from the Democratic Republic of Congo's (DRC) formal sector and a secondary flood of metal from Indonesia. The market was over-supplied for the third consecutive year in 2024 even though global demand exceeded 200,000 metric tons for the first time. Metals investor Cobalt Holdings is betting that the worst is over. The company is aiming to raise $230 million from an initial public offering in London the majority of which it will use to buy 6,000 tons of physical cobalt from Glencore (GLEN.L), opens new tab. Chief Executive Jake Greenberg believes the purchase from Glencore, the first of several, will be "at or near a low point in the cycle", according to the company's registration filing. Greenberg helped launch Yellow Cake (YCA.L), opens new tab, which offers investors a physical uranium play, and Cobalt Holdings is a similar vehicle for punters wanting to ride the cobalt cycle. It's likely to be a bumpy ride and the longer-term bull thesis hinges both on whether the Congo, and to a lesser extent Indonesia, can restrain supply and on whether cobalt can maintain its position as a critical new energy input. The DRC government's imposition of a four-month export ban in February is a positive sign that the world's largest cobalt producer has woken up to the fact it is producing too much. Cobalt has a history of boom-and-bust pricing as super-strong rallies such as those in 2018 and 2022 generated an artisanal supply response. Not this time. Congo's informal sector saw output drop to a historic low last year, both in absolute and relative terms, according to analysts at Benchmark Mineral Intelligence (BMI). Rather, it was China's CMOC Group ( opens new tab which caused the supply shock, more than doubling production to 114,000 tons, above both guidance and assumed nameplate capacity at its TFM and KFM mines in the DRC. The output surge continues unabated. The company reported first-quarter output of 30,414 tons, up 21% year-on-year. That material is stuck for now as the government decides what it will do when the export ban expires in June. But any decision "will inevitably imply a strict limitation of exports in whole or in part until market balance is reached with regard to the supply and demand of cobalt", according to Patrick Luabeya, head of the government's strategic metals authority. Congo's apparent readiness to address its over-production has dispelled some of the cobalt blues, boosting the price to $16 per pound from a 10-year low of $10. The market is now on tenterhooks as it awaits Kinshasa's next move. But if the world's largest producer is prepared to limit exports or production, the market may have found a price floor, an elusive concept for a metal that is largely produced as a by-product of either copper or nickel. Cobalt demand grew by a robust 14% year-on-year in 2024, driven by the metal's usage in electric vehicle (EV) batteries, according to BMI's annual market report commissioned by The Cobalt Institute. The bull case for the metal rests on EV battery demand continuing to expand to the point that cobalt usage starts outstripping production some time around the turn of the decade. BMI expects market surpluses to shrink going forwards, even without any production curbs in the DRC, with a structural supply deficit emerging "from at least the early 2030s". However, cobalt's share of the EV battery market is in flux as Chinese EV producers pivot to battery chemistries that don't use any cobalt at all. This is also true of the fast-growing energy storage sector, which is dominated by lithium-iron-phosphate (LFP) batteries. The good news is that Western automakers are still heavily committed to cobalt-chemistry batteries and may become more so as China tightens export controls on LFP technologies. But cobalt's fortunes remain in significant part dependent on the global battle to produce ever more efficient and powerful batteries. Some of them will contain cobalt, others will not. Cobalt Holdings is not the only entity looking to scoop up cobalt at bargain-basement prices. China's state stockpiler has been doing the same. BMI estimates the National Development and Reform Commission received around 16,600 tons of cobalt in 2024, up from 7,200 tons in 2023. That reduced last year's supply surplus from over 50,000 tons to a still substantial 36,000 tons. While China is well stocked, the West isn't, even though just about every country classifies cobalt as a strategically important metal, not just for its use in batteries but also in the form of super-alloys for aircraft manufacturing. Cobalt Holdings' plans to accumulate what amounts to a Western strategic stockpile is an interesting development in the broader competition between the West and China for access to critical minerals. It helps loosen China's mine-to-market grip on the cobalt supply chain and simultaneously offers a hedge against future disruption in a supply chain which is highly concentrated geographically. However, it remains to be seen how long investors will have to wait to see the cobalt cycle once again turn from bust to boom. There is a lot of cobalt around right now and there still will be even after Cobalt Holdings takes another 6,000 tons off the market. The opinions expressed here are those of the author, a columnist for Reuters.
Times
4 days ago
- Business
- Times
Cobalt prices IPO in bid to become biggest London listing in a year
A Glencore-backed cobalt group has priced its $230 million initial public offering at $2.56 a share as it aims to become the biggest stock market listing in London since early last year. Cobalt Holdings is seeking to capitalise on low prices for the battery metal by stockpiling it in anticipation of a recovery in the long-term, as demand for electric vehicles and energy storage facilities increases. The group announced its intention to float earlier this month, defying the trading turmoil unleashed by President Trump's tariff chaos. However, in a prospectus published on Tuesday it acknowledged that intensifying trade tensions between the US and China could affect the pricing and availability of cobalt and potentially have a 'material adverse effect' on its business. The prospectus confirmed that it intends to sell 90 million new shares priced at $2.56 a share, with unconditional trading to begin on the main market of the London Stock Exchange on June 10. Cobalt Holdings will then use $200 million of the proceeds to purchase 6,000 tonnes of cobalt at a slight discount to market prices from Glencore, the FTSE 100 commodities miner and trader. Glencore will take a 10 per cent stake in the company and the American investment firm Anchorage is taking a 9.5 per cent stake. The cobalt will be stockpiled at secure facilities in Belgium, the Netherlands, Singapore and South Korea. Cobalt Holdings says it offers investors 'pure-play exposure to cobalt … without the direct risks and liabilities associated with cobalt exploration, development or mining operations'. The price of cobalt has fallen sharply in the past few years, losing about three quarters of its value from a recent peak in 2022 to the start of this year. In response to the supply glut, the Democratic Republic of Congo, which produces three-quarters of the world's cobalt, in February said it was suspending exports for four months. Prices have rallied by about 50 per cent since then but remain at less than half their 2022 high, with the DRC considering an extension of its ban in an attempt to further support prices. Global cobalt demand stood at about 239,000 tonnes last year while supply was nearer 254,000 tonnes, according to Benchmark Minerals. The surplus is forecast to continue this year and the 6,000 tonnes Cobalt Holdings plans to buy would account for about a third of excess supply volumes. Jake Greenberg, chief executive of Cobalt Holdings, argues that 'now is an opportune time to purchase cobalt when cobalt is trading below long-term average prices, providing investors with exposure to the cobalt price as the market is expected to turn from oversupply to deficit in the coming years'. The group says that demand is expected to increase to enable production of high-performance batteries for use in electric vehicles, portable electronics and energy storage systems. Its prospectus acknowledges that the bet may not pay off, with Trump's tariffs among the risks to demand. The cobalt price could be affected by 'any trade wars between the United States and China or other end users which may include the imposition of tariffs on EVs and consequently reduce the demand for cobalt in EV battery production'. 'In addition, the introduction of any US tariffs on cobalt produced or refined in China could impact the supply of cobalt available to the company and limit any resale market as a result of reduction in demand from the US,' it said. It noted that some big cobalt producers were stepping up production. 'Although the directors believe that cobalt is currently in oversupply, causing historically low pricing, there is no guarantee that cobalt production will not continue to increase or that global supply levels will not remain high. If supply continues to outpace demand, the market surplus could widen, further reducing cobalt prices,' it said. This could have a 'material adverse effect' on the business.
Daily Mail
19-05-2025
- Business
- Daily Mail
Boost for City as two companies confirm plans to list on the London stock market
The City was handed a boost yesterday as two companies confirmed plans to list on the London Stock Exchange (LSE). Cobalt Holdings expects shares to start trading 'on or around' June 10, while trading platform iForex is aiming for late June. A dearth of listings and firms leaving following takeovers has prompted City figures to speak to the Chancellor and officials over how to increase investment in British companies and make the LSE more attractive. Cobalt is run by Jake Greenberg, who helped set up specialist uranium company Yellow Cake and hopes to emulate its success by investing in cobalt – used in electric car batteries. Miner Glencore will invest £18million for a 10 per cent stake while Anchorage will put in £17million for 9.5 per cent, valuing Cobalt at around £180million. Israel-based iForex, which specialises in contracts for difference – a type of bet on financial markets – is thought to be seeking a value of around £50million. Founder Eyal Carmon will remain a majority shareholder and is recruiting mining veteran Mick Davis – who was chief executive of FTSE 100 giant Xstrata until its merger with Glencore in 2013 – to its board.
Yahoo
13-05-2025
- Business
- Yahoo
Cobalt Holdings to raise $230m through IPO in London
Cobalt Holdings has announced plans to raise approximately $230m in an initial public offering (IPO) in London. Glencore International and entities managed by Anchorage Structured Commodities Advisor have committed as cornerstone investors to purchase approximately 20.5% of the shares to be offered in the IPO. Cobalt Holdings has secured a six-year supply contract with Glencore, ensuring access to premium-grade cobalt worth up to $1bn, and a further agreement to acquire up to 1,500 tonnes (t) of cobalt from Anchorage in 2031. The company's initial purchase involves 6,000t of cobalt, worth around $200m, from Glencore at a discount to the current spot price. Cobalt Holdings' ordinary shares are planned to be admitted to the equity shares category of the official list of the Financial Conduct Authority (FCA) and to trading on the Main Market of the London Stock Exchange. The expected admission date is June 2025. The offering positions Cobalt Holdings as the only company offering public equity investors pure-play direct exposure to the price of cobalt, a strategic raw material, without the risks and liabilities of cobalt exploration and mining operations. The current oversupply in the cobalt market provides an opportunity to acquire cobalt below long-term average prices, especially with the anticipated demand surge from industries such as electric vehicle (EV) batteries, portable electronics and energy storage systems. Cobalt Holdings CEO Jake Greenberg said: "Our strategy is simple: to provide equity investors with direct, pure-play exposure to the price of cobalt through a low-risk, low-cost business model that sees us buying physical cobalt and holding it for the long-term. 'We believe NOW is the right time to build a strategic stockpile of cobalt. The long-term price of cobalt has historically been well above the prevailing spot price. The DRC [Democratic Republic of Congo] has begun to impose export restrictions, reducing metal supply, while demand for cobalt more than doubled between 2015 and 2024, and is expected to rise by more than 54% between 2024 and 2031, primarily on the back of accelerating EV battery demand growth. 'We are delighted to have received the support of Glencore and Anchorage as cornerstone investors. Having two cobalt market experts partnering with us is a great validation of the merits of our strategy, timing and business model." Cobalt Holdings has committed to storing its cobalt in secure facilities across Belgium, the Netherlands, Singapore and South Korea to mitigate geopolitical risks and has insurance coverage for all metals in its care. In April this year, Premier African Minerals signed a non-binding letter of interest with Glencore International regarding the potential sale of spodumene concentrate from its Zulu Lithium and Tantalum Project. "Cobalt Holdings to raise $230m through IPO in London" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
13-05-2025
- Business
- Yahoo
Cobalt Holdings plans to raise £175m in London IPO
Cobalt Holdings has said that it plans to list on the London market next month and that miner Glencore (GLEN.L) would be taking a 10% stake in the company. In an announcement on Monday, Cobalt said that it was aiming to raise about $230m (£174.7m) from a global offer of shares and that it intended to make its initial public offering (IPO) on the London Stock Exchange in June. The company was created primarily to buy and hold physical cobalt, aiming to give investors "pure-play" direct exposure to the price of the metal, which is used in renewable energy storage and electronic devices. Cobalt said that Glencore had agreed to participate as a cornerstone investor, putting in about $24.3m, which would be the equivalent to around a 10% stake in the company following its admission onto the market. The company said it had entered into an agreement with Glencore to buy an initial quantity of cobalt worth $200m and then have the right to make five annual subsequent purchases of $160m, providing it with access to up to $1bn of the metal. Cobalt Holdings added that the initial purchase of 6,000 tonnes of cobalt from Glencore would be at a discount to the current market price. Read more: Stocks to watch this week: Alibaba, Walmart, Burberry, Imperial Brands and Tui Cobalt said that investment firm Anchorage would also act as a cornerstone investor, putting around $23m into the company, the equivalent of a 9.5% stake. It said Anchorage would supply up to a further 1,500 tonnes of cobalt to the company in 2031. Jake Greenberg, CEO of Cobalt Holdings, said: "Our strategy is simple: to provide equity investors with direct, pure-play exposure to the price of cobalt through a low-risk, low-cost business model that sees us buying physical cobalt and holding it for the long-term. He said that demand for cobalt had "more than doubled between 2015 and 2024, and is expected to rise by more than 54% between 2024 and 2031, primarily on the back of accelerating EV battery demand growth." Cobalt's listing would be a boost for the London Stock Exchange, which has struggled to attract new IPOs in recent years, as well as experiencing some high-profile exits. Hopes of an upcoming IPO by China-founded fast fashion giant Shein have been dampened by reports that progress had slowed on the listing amid US president Donald Trump's trade war. Richard Hunter, head of markets at Interactive Investor, said that Cobalt Holding's "actual float is not a major development (around $230m) and may offer investors little more than being a way to play the price of cobalt, a key component of EV car batteries." "More broadly, it is a positive sign that the company should have chosen London as a listing venue at a time when it is struggling to retain some of its larger names, and the fact that there are so many mining companies already listed here may have tipped the scales in its favour," he said. Dan Coatsworth, investment analyst at AJ Bell, said Cobalt Holdings "looks like a carbon copy of Yellow Cake (YCA.L)", which is an existing London-listed commodity investment vehicle focused on uranium, with Greenberg having been part of its founding team. He said that "both follow the same strategy of building up a stockpile of physical product while prices are low. Both investment vehicles are taking the view that demand will grow for their underlying commodity so their portfolio value will also go up, and they can sell goods for more than they originally paid." Coatsworth added that having Glencore on the shareholder register and as a supplier of product helps the IPO "stand out", as having a "FTSE 100 (^FTSE) miner as a backer helps to give the investment vehicle some credibility". "It all sounds promising on paper, but cobalt prices are mostly out of Cobalt Holdings' control," he said. "It is at the mercy of the market, and commodity prices in general are widely unpredictable. "That makes this a high-risk investment. The only situation where Cobalt Holdings could influence the market price is if it controlled a large chunk of the world's cobalt resources and withheld it from sale. That's highly unlikely to happen." Read more: Bank of England's commitment to bring inflation down is 'unwavering', says Bailey The most bought stocks and funds for investors in April Stocks: Create your watchlist and portfolioSign in to access your portfolio
