Cobalt firm taps in to electric car boom with £174m London stock market float

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"Cobalt Holdings Plans £174 Million London Float Amid Electric Vehicle Demand"

Cobalt firm taps in to electric car boom with £174m London stock market float analysis cover image The Guardian 8.0
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Original Article Source: https://www.theguardian.com/business/2025/may/12/cobalt-electric-car-boom-london-stock-market-float-glencore-ev-prices
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TruthLens AI Summary

Cobalt Holdings, a cobalt trading company, has announced plans to raise £174 million through a stock market float in London, aiming to capitalize on the growing demand for electric vehicle (EV) batteries despite current investor hesitancy. The company intends to use the funds to secure a supply of cobalt from Glencore, a major FTSE 100 mining company, which will also invest $24 million for a 10% stake in Cobalt Holdings. Although the demand for electric cars has been increasing, it has not met earlier expectations, prompting some global automakers to slow their transition from traditional petrol and diesel vehicles. This has led to a decline in cobalt prices, making it challenging for companies in the EV sector to attract investment. Nevertheless, Cobalt Holdings believes that the current oversupply of cobalt will be temporary, presenting an opportunity to acquire the metal at lower prices.

Founded by Jake Greenberg, who previously co-founded Yellow Cake, a company focused on uranium procurement, Cobalt Holdings aims to build a strategic stockpile of cobalt, which is essential for stabilizing nickel manganese cobalt (NMC) batteries used in electric vehicles. Despite the trend of manufacturers opting for cheaper lithium iron phosphate (LFP) batteries, NMC batteries are still preferred for longer-range EVs. Greenberg highlighted the historical price trends of cobalt, asserting that the long-term value has consistently exceeded current spot prices. Furthermore, geopolitical factors, such as export restrictions from the Democratic Republic of Congo—which accounts for approximately 75% of the global cobalt supply—are expected to further influence the market. As battery demand continues to rise, particularly in light of impending bans on petrol and diesel cars in regions like the UK and EU, Cobalt Holdings' float represents a significant event in the London stock market amid a recent trend of delistings and decreased new listings.

TruthLens AI Analysis

The article highlights the recent announcement by Cobalt Holdings regarding its plan to raise £174 million through a stock market float in London, betting on the ongoing demand for electric car batteries. This development takes place amidst a backdrop of fluctuating investor confidence in the electric vehicle (EV) market, driven by recent slower-than-expected growth in EV adoption among major car manufacturers.

Market Context and Implications

The decision by Cobalt Holdings to tap into the stock market reflects a strategic move to capitalize on the long-term demand for cobalt, a crucial component in electric vehicle batteries. Despite current oversupply and decreasing cobalt prices, the company believes that this is a temporary situation, allowing them to acquire the metal at a lower cost. This perspective is critical, as it suggests a divergence from prevailing market sentiments that are wary of investing in EV-related ventures.

Investor Sentiment and Market Dynamics

The news indicates a dual reality within the market. On one hand, there is a growing demand for electric vehicles, yet this has been tempered by the hesitance of car manufacturers to fully transition away from internal combustion engines. This cautious approach has dampened investment flows into electric vehicle-related projects and led to a decrease in commodity prices like cobalt. Cobalt Holdings’ assertion that the oversupply will be short-lived may be an effort to instill confidence in potential investors, suggesting that the company has a forward-looking strategy that could yield profitable returns despite current market conditions.

Historical Pricing Trends and Strategic Positioning

Jake Greenberg’s perspective on cobalt pricing points to historical trends where the long-term price of cobalt has surpassed the current spot price. This assertion aims to create an optimistic narrative around future profitability for investors. The mention of export restrictions from the Democratic Republic of Congo further complicates the market dynamics, as they may lead to future supply constraints that could drive prices higher.

Community and Investor Targeting

The article likely aims to attract investors who are optimistic about the electric vehicle sector and its future potential. By emphasizing a strategic approach and the temporary nature of current oversupply, it seeks to engage those who might be hesitant due to recent market fluctuations. The narrative appears tailored to appeal to environmentally conscious investors looking for opportunities in sustainable technologies.

Market Impact and Stock Implications

This announcement could have significant implications for stocks related to electric vehicles and battery production. Companies involved in cobalt mining and electric vehicle manufacturing may experience volatility as investors react to Cobalt Holdings’ strategic positioning. The stock market's reception of this float could also influence broader investor sentiment toward the EV sector.

Geopolitical Considerations

The mention of export restrictions from the Democratic Republic of Congo underlines the geopolitical factors that influence the cobalt market. Given the geopolitical tensions and the strategic importance of cobalt in the transition to electric vehicles, this aspect of the story connects to broader discussions on global supply chains and resource management.

Trustworthiness and Manipulative Potential

The article appears to present a factual account of Cobalt Holdings’ plans and market conditions. However, the framing of the narrative, particularly the emphasis on short-term oversupply versus long-term demand, does present a potential for manipulation. By highlighting an optimistic outlook amidst a generally cautious market, it could lead some investors to make decisions based on an overly positive outlook.

In conclusion, while the article provides insights into Cobalt Holdings’ strategic move, it also plays into larger narratives about the electric vehicle market's future. The trustworthiness of this report hinges on the accuracy of the claims regarding cobalt supply dynamics and the underlying motivations of the company involved.

Unanalyzed Article Content

Source URL: https://www.theguardian.com/business/2025/may/12/cobalt-electric-car-boom-london-stock-market-float-glencore-ev-prices

A cobalt trading company has said it will raise £174m in rare a stock market float in London, in a bet on demand for car batteries that defies investor nerves around the growth in electric cars.

Cobalt Holdings said it will raise $230m (£174m) in order to buy up a supply of the metal, a crucial element in electric car batteries, from the FTSE 100 mining company Glencore. The miner will invest $24m, taking a stake of about 10%, according to a statement to theLondon Stock Exchangeon Monday.

Demand for electric cars is still growing rapidly around the world, but thatgrowth has been slower than previously expected, leading to a series of global carmakers to slow down their transition away from petrol and diesel. That has made it much tougher for companies to raise money for ventures related to electric vehicles, and has caused cobalt prices to drop.

However, Cobalt Holdings argued thatoversupply of the metal will be short-lived, giving it an opportunity to buy cheaply.

The company was founded by Jake Greenberg, who was one of the founders of Yellow Cake, a similar London-listed vehicle that buys and holds uranium for nuclear fuel. Yellow Cake’s valuation, at about £1bn, is more than double what it was worth in July 2018, when the shares floated.

Most electric car batteries rely on lithium ions to store energy, but nickel, manganese and cobalt (NMC) play an important role instabilising the NMC batteries during recharging. Cobalt is the most expensive of those metals, meaning that companies are trying to find cheaper alternatives. Many makers of cheaper cars have opted for lithium iron phosphate (LFP) batteries made from cheaper elements, yet NMC remains the go-to chemistry for longer-range vehicles.

“We believe NOW is the right time to build a strategic stockpile of cobalt,” said Greenberg. “The long-term price of cobalt has historically been well above the prevailing spot price.

“The Democratic Republic of Congo has begun to impose export restrictions, reducing metal supply, while demand for cobalt more than doubled between 2015 and 2024, and is expected to rise by more than 54% between 2024 and 2031, primarily on the back of accelerating EV battery demand growth.”

Despite carmakers’ slower investments in electric cars, demand for batteries is expected to rise in line with bans on sales of petrol and diesel cars, particularly in the UK and EU. Theworld’s biggest battery maker, China’s CATL, said on Monday that it would raise $4bn in a secondary share offering in Hong Kong, in what would be the largest float of 2025 so far.

The Cobalt Holdings listing would be the biggest in two years in London, amid a drought. During 2024, 88 companies delisted from theLondon Stock Exchangeor moved their primary listing from its main market. Only 18 listed.

The Democratic Republic of Congo produces about three-quarters of global cobalt supply, although its record has been marred by persistent allegations of child labour and artisanal mining in dangerous conditions, according toreports by the human rights group Amnesty Internationaland others.

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Source: The Guardian