The Canadian mining company First Cobalt buys the US mining exploration company US Cobalt. The aim is to form a leading producer of cobalt outside the Democratic Republic of Congo, which currently accounts for over 60 percent of the world's cobalt deliveries.
This is stated in a press release from First Cobalt.
The merged company will have assets in the form of 50 smaller mines in Canadian Ontario, as well as the Iron Creek project in American Idaho. In addition, the company controls the only refinery in North America that is authorized to produce cobalt of a quality approved for car batteries.
Just the development of electric vehicles is behind the rapidly growing demand for cobalt, which is used for the batteries. Only since the end of 2017, the market price for the rare metal has risen above 35 percent and compared to the bottom levels in early 2016, the price has increased by 270 percent.
"We expect a shortage of cobalt over the next five years. Despite this, few companies are working to identify and develop new assets," comments First Cobalt's CEO Trent Mell.
The acquisition takes place with payment of First Cobalt shares, 1.5 FC shares for each share in US Cobalt. Following the acquisition, First Cobalt's current owner will control 62.5 percent of the new company.
Source: Dagens Industri
