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Highlights
Glencore’s shares advanced following news of its stake in cobalt-focused Cobalt’ planned London IPO.
Cobalt has signed a multi-year cobalt supply agreement with Glencore.
The planned listing signals a rare move in the struggling primary market of the London Stock Exchange.
Glencore, part of the FTSE 100 and listed under the LSE index (LON:GLEN), gained momentum following Cobalt’ announcement of a planned public listing on the London Stock Exchange. The upcoming initial public offering will reportedly include an investment from Glencore, aligning with the company's focus on critical minerals, particularly cobalt.
Alongside Glencore, investment management firm Anchorage Capital is also expected to participate, with both parties accounting for a combined minority stake. The news contributed to a surge in Glencore’s share price, highlighting renewed market interest in key battery metals despite recent price pressures.
Supply agreement underscores commodity strategy
As part of the strategic arrangement, Cobalt and Glencore have entered into a supply agreement for cobalt spanning several years. The agreement outlines the initial acquisition of a significant quantity of cobalt, reportedly at a price below the current market spot rate. The volume secured represents a large share of the anticipated global surplus for the year.
Additionally, a future-oriented supply deal between Cobalt and Anchorage is in place, scheduled to take effect at the start of the next decade. These deals underscore the firms’ focus on long-term access to physical commodities, aligning with structural demand related to battery technology and electrification.
Cobalt’s pricing trends and relevance
Cobalt, used heavily in electric vehicle battery production, has experienced sharp pricing shifts in recent periods. After peaking in the past, prices have decreased substantially due to an oversupply in the global market. Despite these movements, interest in the metal remains high among companies looking to secure exposure to materials central to energy transition initiatives.
By creating a vehicle focused solely on physical cobalt, Cobalt is aligning its business model with earlier examples in the London market that applied a similar approach to uranium. The company's operational direction is shaped to avoid direct engagement with mining or exploration activities, instead centering on storage and price exposure.
Impact on London Stock Exchange
The planned IPO is expected to draw attention to the London Stock Exchange, which has faced declining listing volumes in recent years. A number of firms have opted to exit the exchange in favour of alternative capital-raising strategies, leading to one of the lowest listing periods in over a decade.
With Cobalt’ debut on the LSE, observers have noted the rarity of such listings, especially involving physical commodities. The listing model mirrors previous commodity-focused entities, reinforcing London's relevance in metal-focused financial instruments.
Cobalt’ leadership and strategy
Cobalt is led by Jake Greenberg, whose previous experience includes co-founding a uranium investment entity listed in London. Drawing from that structure, the new vehicle aims to provide market exposure to cobalt pricing trends through a passive commodity framework.
The leadership team has outlined a low-operational-cost approach focused on physical accumulation rather than resource development. This format aims to provide an alternative for participants seeking indirect access to the commodity without the typical uncertainties related to mining operations or development cycles.
