Cobalt Holdings drops London listing plan

British metals investment company Cobalt Holdings Plc last week dropped plans to launch an initial public offering (IPO) on the London Stock Exchange (LSE), dashing investor hopes for what would have been the largest mining listing on the London market since 2022, mining.com reports.

The company had previously aimed to raise up to $230 million through the offering and use most of the funds to buy 6,000 tonnes of physical cobalt from Glencore at a discounted price.

The IPO was part of Cobalt Holdings' strategic plan to capitalize on a struggling market that has suffered from three consecutive years of oversupply despite healthy demand, which has seen cobalt prices fall 75% in the past three years.

The company, led by mining entrepreneur Jake Greenberg, is betting on a recovery in the cobalt market and believes that buying physical cobalt gives investors direct exposure to the metal used in battery manufacturing without the risks associated with mining operations.

According to Benchmark Mineral Intelligence, the volume obtained from Glencore's purchase of the metal would represent about a third of the global cobalt surplus projected for 2025 and a sixth of the previous year.

"We believe now is the right time to build a strategic cobalt stockpile,” Greenberg said in a filing ahead of the planned listing.

As part of the cobalt deal, Glencore agreed to buy about 10% of the shares to be offered in the IPO. Investment firm Anchorage Capital was also to acquire a 9.5% stake, committing to supply up to 1,500 tonnes of cobalt by 2031.

But on June 4, Cobalt Holdings decided to abandon the IPO, without specifying the reasons for the change of position. However, sources cited by Reuters indicated that the process was stopped due to lack of investor demand.

The company's share price was set at $2.56/share in the week before the IPO was abandoned. The offering would have been the largest on the London Stock Exchange since Ithaca Energy raised $300 million in late 2022. Glencore holds the record for the largest IPO on the London Stock Exchange. The mining and commodities trading company went public in May 2011 at a valuation of more than £36 billion (about $60 billion at the time) and raised about $10 billion in total through a dual listing in Hong Kong.

Other notable London IPOs include the offering of Kazatomprom, the world's largest uranium producer, which debuted in November 2018. Around the same time, another uranium producer, Yellow Cake, also founded by Greenberg, was listed in London, according to the source cited.