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The basic products merchant Glencore is supporting a cobalt investment company that plans to float in London this spring in what would be an impulse for the market of listings with difficulties of the United Kingdom, according to people familiar with the matter.
Cobalt Holdings and its Glencore cornerstone inverter are betting that the demand for metal, a key component of electric car batteries, will increase in the transition to clean energy.
The company aims to raise £ 180 million on a May list.
Jake Greenberg Cobalt Holdings is based on the investment company that lies in London, Yellow Cake, which buys and maintains the physical uranium that is used to make fuel of the nuclear reactor.
Despite the small amount, the initial public offer is an impulse for the United Kingdom after less than 20 companies that appear in the exchange of London last year, the lowest number since the 2009 financial accident.
Glencore and Cobalt Holdings declined to comment.
Although a leap in cobalt demand is widely predicted, a global excess of supply has depressed prices. Cobalt prices have collapsed to around $ 11 per pound from about $ 40 in 2022.
Glencore is expected to take a 10 percent participation in Cobalt Holdings, according to people familiar with the agreement. The FTSE 100 group also agreed to sell around $ 200 million cobalt to the company under a long -term agreement, which would remove some metal from the excessive market.
Most of Glencore Cobalt comes from the Democratic Republic of the Congo, which in February announced an export prohibition of four months of metal in an attempt to stop pricing.
“A large offer of offer will probably lead to significant prices correction in the coming months,” said Fastmarkets analyst Rob Searle.
Cobalt Holdings will work similar to the yellow cake and another uranium investment vehicle administered by Sprott Asset Management, a global asset manager focused on precious and critical materials.
“Ultimately, you really want to sustain physicist [metals]If you are an investor, “said Ryan McIntyre, a managing partner of Sprott.” You can exchange derivatives all day, but if you need physicist, you need physicist. ”
A future shortage of uranium supply “could create the opportunity to leave” for the company, McIntyre said.
Yellow Cake’s executive president Andre Liebenberg said that in a “supply crunch” of uranium, buyers could “come to us and borrow our material or make an offer and buy the company.”
In the Cobalt market, analysts said there was a higher risk of “replacement”, in which the battery metal could be replaced by an alternative or designed mineral out of batteries. This could depress demand.
A merchant said that Dr Congo’s export prohibition could be counterproductive, by making the cobalt market already volatile less attractive to car manufacturers that could consider alternatives for their batteries.
Glencore has had preliminary conversations about the sale of his multimillion -dollar mines of copper and cobalt in Dr Congo, Financial Times reported in February.
