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Cobalt Holdings has said that it plans to list on the London market next month and that miner Glencore (GLEN.L) would be taking a 10% stake in the company.
In an announcement on Monday, Cobalt said that it was aiming to raise about $230m (£174.7m) from a global offer of shares and that it intended to make its initial public offering (IPO) on the London Stock Exchange in June.
The company was created primarily to buy and hold physical cobalt, aiming to give investors "pure-play" direct exposure to the price of the metal, which is used in renewable energy storage and electronic devices.
Cobalt said that Glencore had agreed to participate as a cornerstone investor, putting in about $24.3m, which would be the equivalent to around a 10% stake in the company following its admission onto the market.
The company said it had entered into an agreement with Glencore to buy an initial quantity of cobalt worth $200m and then have the right to make five annual subsequent purchases of $160m, providing it with access to up to $1bn of the metal. Cobalt Holdings added that the initial purchase of 6,000 tonnes of cobalt from Glencore would be at a discount to the current market price.
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Cobalt said that investment firm Anchorage would also act as a cornerstone investor, putting around $23m into the company, the equivalent of a 9.5% stake. It said Anchorage would supply up to a further 1,500 tonnes of cobalt to the company in 2031.
Jake Greenberg, CEO of Cobalt Holdings, said: "Our strategy is simple: 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.
He said that demand for cobalt had "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."
Cobalt's listing would be a boost for the London Stock Exchange, which has struggled to attract new IPOs in recent years, as well as experiencing some high-profile exits. Hopes of an upcoming IPO by China-founded fast fashion giant Shein have been dampened by reports that progress had slowed on the listing amid US president Donald Trump's trade war.
Richard Hunter, head of markets at Interactive Investor, said that Cobalt Holding's "actual float is not a major development (around $230m) and may offer investors little more than being a way to play the price of cobalt, a key component of EV car batteries."