JOHANNESBURG/LONDON (Reuters) – Brazilian miner Vale is seeking to sell un-mined cobalt worth hundreds of millions of dollars to investors, as speculation rises over a shortage of the metal needed to make batteries, sources familiar with the matter said.
Such streaming, which allows an investor to make an upfront payment in exchange for future production at a discounted price, has expanded as a form of finance for precious and base metals companies but this deal would be a first for the booming cobalt sector.
Cobalt is a critical component in rechargeable lithium-ion batteries and its price has benefited from a push by governments and automakers to promote electric vehicles to cut emissions from diesel and petrol cars.
Prices have soared by nearly 150 percent since the beginning of last year to around $80,000 a tonne, spurred in part by nervousness about reliance on top cobalt producer Democratic Republic of Congo, which is plagued by pockets of lawlessness and conflict.
Carmakers such as Volkswagen (VOWG_p.DE) have sought contracts to lock in long-term supplies of cobalt for their ambitious electric vehicle plans.