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Cobalt Holdings has said it plans to list in London in June in an initial public offering that will see commodities trader Glencore take a 10 per cent stake in the metal investment company.
Cobalt Holdings said on Monday it planned to raise about $230mn from the flotation, with Glencore and investment firm Anchorage acting as cornerstone investors and taking an aggregate 20.5 per cent stake.
The groups are betting that the clean energy transition will drive demand for cobalt, which is used in electric-car batteries but has nosedived in price in the past year.
The listing would be a boost for London’s main market, which has struggled to attract and retain international businesses in the face of competition from other global listing venues and the growing trend of companies staying private for longer. Last year the London Stock Exchange suffered its biggest exodus since the financial crisis.
Cobalt Holdings, led by Jake Greenberg, is modelled on the London-listed investment company Yellow Cake, which listed in London in 2018 and buys and holds the uranium used to make nuclear reactor fuel.
Cobalt Holdings said on Monday it had secured a six-year supply contract with Glencore in which the trader will sell it cobalt worth up to $1bn. That includes an initial $200mn purchase of 6,000 tonnes of the metal at a discount to the current spot price, which it said represented about a third of the world’s excess supply of cobalt in 2025.
The investment group has also signed an agreement with Anchorage to acquire up to 1,500 tonnes of cobalt in 2031.
An oversupply of cobalt has pushed down the price of the metal, which this year fell to about $11 per pound from close to $40 in 2022. The government of the Democratic Republic of Congo, the world’s largest producer of the metal, issued a temporary ban on exports this year as it seeks to control supply and stabilise falling prices.
Greenberg said the group’s aim was “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”. The company said its model offers investors exposure to the metal “without the direct risks and liabilities associated with cobalt exploration, development or mining operations”.