Cobalt confirms June market debut

(Sharecast News) - Cobalt Holdings confirmed on Monday it would be joining the London Stock Exchange next month in a $230m initial public offering. The firm said it expected to start trading on the main market on or around 10 June, with Anglo-Swiss commodity trader Glencore and investment firm Anchorage participating as cornerstone investors.

Glencore will invest $24.3m, giving it a stake of around 10% post-IPO, while Anchorage will own around 9.5% following a $23m investment.

The UK firm, which purchases and holds the metal, was created to give investors direct exposure to the price of cobalt.

Used in make high-performance batteries found in electric cars, portable electronics and energy storage systems, demand for cobalt more than doubled between 2015 and 2024.

Oversupply, however, has weighed heavily on prices recently, and it is now trading at around $11 per pound, compared to just below $44 per pound in 2022.

However, announcing the IPO at the start of May, Cobalt Holdings argued the weaker prices was an opportunity to stockpile the metal. The green energy transition is expected to support ongoing strong demand, it argued, while the Democratic Republic of Congo - the world's largest producer of the metal - has started to introduce export restrictions.

Cobalt Holdings has a six-year contract with Glencore, which will see the trader sell it cobalt worth up to $1bn, while its agreement with Anchorage could see it acquire up to 1,500 tonnes in 2031.