During June, cobalt prices declined from $90,000 per metric ton (mt) to $77,800/mt, according to the London Metal Exchange. Only time will tell if this is a slight dip in cobalt’s meteoric run or the market reaction to new potential capacity announcements.
One of those announcements came from Cobalt 27 Capital Corp., which closed on its previously announced acquisition of the world’s first pure-cobalt stream, with an amount of finished cobalt equal to 32.6% of the cobalt production from Vale’s Voisey’s Bay mine. The company paid Vale a total up-front cash consideration of US$300 million, which represents a prepayment of a portion of the purchase price for the sale of cobalt to Cobalt 27. Cobalt 27 will also make ongoing payments equal to 18% for each pound of cobalt delivered under the cobalt stream, until Cobalt 27 has recovered the full value of the advance amount through Vale’s deliveries of finished cobalt under the cobalt stream. After that, the ongoing payments will increase to 22% of the cobalt reference price.
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