Glencore backs cobalt investment firm planning UK listing

GLENCORE is to take a 10% stake in a cobalt investment company that plans to float in London during May, the Financial Times reported on Tuesday.The company – Cobalt Holdings – will buy physical supplies of cobalt in the manner of other  commodity investment vehicles such as the London-lsited Yellow Cake which operates in the uranium sector.Glencore has agreed to sell $200m-worth of its cobalt, produced as a by-product of its copper mining in the Democratic Republic of Congo, to Cobalt Holdings under a long-term agreement, which would take some metal off the oversupplied cobalt market.Cobalt prices have slumped to about $11 per pound from close to $40 in 2022 partly owing to an increase in supply from China’s CMOC Group which manages mines in the Congo. So significant was the slump in the cobalt price that the Congo’s government announced last month it would suspend cobalt exports for four months. It may then impose export quotas thereafter to control supply.Glencore has cut its production target for cobalt this year in response to weak market conditions. The company will produce between 35,000 to 40,000 tons of the battery metal this year, down as much as 42% from a production target set in December 2022, it said.Selling $200m in cobalt to Cobalt Holdings would be meaningful, said the FT citing the comments of Fastmarkets analyst Rob Searle. “A cut of supply this large will probably lead to a significant price correction in the coming months,” he said.“Ultimately you really want to hold physical [metals], if you’re an investor,” Ryan McIntyre, a Sprott managing partner told the newspaper.  “You can trade derivatives all day long but if you need physical you need physical.”A future shortage of uranium supply “could very well create an opportunity” in which some metal was sold, said McIntyre. At present, however, Sprott intends to maintain its current structure for the uranium fund.As with Yellow Cake, Sprott manages an uranium investment company. Its Sprott Physical Uranium Trust, listed on the Toronto Stock Exchange, held 61.6 million pounds of uranium in mid-2023 – more metal than the then global supply deficit.In the market for cobalt, analysts said there was a greater risk of “substitution”, in which the battery metal could be replaced by an alternative mineral or designed out of batteries, said the FT. This could depress demand. One trader said the Congo export ban could backfire, by making the already volatile cobalt market less appealing to carmakers that might consider alternatives for their batteries.The post Glencore backs cobalt investment firm planning UK listing appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com