Cobalt Holdings Raises £174m in Rare London Stock Float Amid Electric Car Battery Demand

Strategic Insights -

A cobalt trading company, Cobalt Holdings, has announced a £174m stock market float in London, betting on the rising demand for car batteries despite investor concerns about the growth of electric cars. The company plans to raise $230m to buy a supply of cobalt from Glencore, a FTSE 100 mining company, with the miner investing $24m and taking a stake of about 10%. Cobalt Holdings' move follows a trend of carmakers slowing down their transition to electric vehicles, leading to reduced demand for cobalt and causing prices to drop.

Key Takeaways:

  • Cobalt Holdings will raise £174m in a stock market float in London, betting on rising demand for car batteries.
  • The company plans to buy a supply of cobalt from Glencore, a FTSE 100 mining company, with Glencore investing $24m and taking a 10% stake.
  • Demand for electric cars has slowed down, leading to reduced demand for cobalt and causing prices to drop.
  • Cobalt is a crucial element in electric car batteries, making up 50% of their cost.
  • The Democratic Republic of Congo produces about three-quarters of global cobalt supply, but its mining practices have been marred by allegations of child labour and artisanal mining in dangerous conditions.
  • CATL, the world's biggest battery maker, will raise $4bn in a secondary share offering in Hong Kong.
  • Cobalt Holdings' listing would be the biggest in two years in London, amid a drought of new listings.

Statistics:

  • Cobalt Holdings plans to raise $230m to buy a supply of cobalt.
  • Glencore will invest $24m and take a 10% stake in Cobalt Holdings.
  • Demand for electric cars is expected to rise by 54% by 2031, driven by accelerating EV battery demand growth.
  • Global cobalt supply is dominated by the Democratic Republic of Congo, which produces about three-quarters of global supply.
  • 88 companies delisted from the London Stock Exchange or moved their primary listing from its main market in 2024, while only 18 listed.

Sources:

  • AFP/Getty Images
  • Amnesty International reports
  • China's CATL press release
  • Cobalt Holdings statement to the London Stock Exchange
  • Glencore statement
  • Reuters article
  • Yican Electric Vehicle Industry Research Report