LONDON — Investors looking for a way to profit from surging demand for cobalt used in batteries for Tesla Inc. electric cars have had a hard time until now.
While futures prices for the metal are up about 130 per cent since the end of 2015, a lack of buyers and sellers on the market, the high cost of more than $50,000 (U.S.) a contract, and a dearth of listed miners specializing in cobalt has kept many investors away. Pala Investments Ltd. plans to change all that.
The Swiss mining fund, which began buying cobalt about a year ago in a bet on demand, plans to sell the metal to Toronto-listed Cobalt 27 Capital Corp. The Canadian firm, headed by Pala investment team managing director Anthony Milewski, plans to raise $200-million (Canadian) on the TSX Venture exchange (ticker KBLT) to purchase cobalt, including from the Zug-based fund.
Mr. Milewski is being supported by advisers including Portal Capital LLC fund manager Robert Mitchell, who’s also been buying up physical cobalt through his Green Energy Metals Fund.
“For equity investors, there’s been a dearth of pure-play opportunities in the cobalt market,” Portal’s Mr. Mitchell said by phone from Tualatin, Ore.
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