Glencore is set to acquire a 10% stake in Cobalt Holdings, a newly established investment firm planning to debut on the London Stock Exchange in May, according to the Financial Times.
Cobalt Holdings will function similarly to commodity investment firms like Yellow Cake, which specializes in uranium, by purchasing and storing physical cobalt reserves.
As part of a long-term supply agreement, Glencore will sell $200 million worth of cobalt—produced as a by-product of its copper mining operations in the Democratic Republic of Congo (DRC)—to Cobalt Holdings. The move aims to absorb excess supply in an oversaturated market.
Cobalt prices have plunged from nearly $40 per pound in 2022 to around $11 per pound, primarily due to increased production from China’s CMOC Group, which operates major mines in the DRC.
In response to the price collapse, the Congolese government imposed a four-month suspension on cobalt exports last month, with possible export quotas to follow.
Amid weak market conditions, Glencore has slashed its 2024 cobalt production target to 35,000–40,000 tons—up to 42% lower than its December 2022 forecast.
The $200 million cobalt sale to Cobalt Holdings could significantly influence the market. Fastmarkets analyst Rob Searle anticipates a price correction in the coming months, stating, “A supply cut of this magnitude will likely drive prices higher.”
According to Ryan McIntyre, managing partner at Sprott, which operates the Sprott Physical Uranium Trust, investors view physical metal holdings as a safer alternative to derivatives trading. While uranium faces potential shortages, cobalt’s outlook remains uncertain due to the risk of substitution in battery technology.
Market analysts caution that continued volatility and supply constraints—such as the DRC’s export ban—could prompt automakers to seek alternatives, accelerating the shift away from cobalt in electric vehicle batteries.
