Australian miner Jervois Mining said on Tuesday it would buy Finland-based Freeport Cobalt for $160 million in a deal that could make it the second largest cobalt producer outside China.
The miner said the acquisition would be funded through an A$313 million ($230.90 million) underwritten equity raising, with Jervois’ largest shareholder, AustralianSuper, committing to invest about A$50 million.
Geneva-based commodity trading giant Mercuria is also set to invest up to $40 million as part of the equity raise, Jervois added.
The deal comes close on the heels of a $100 million bond offering by Jervois last week to help fund the construction of its Idaho cobalt operation in the United States, which is slated to start production in mid-2022.
Combined with its buy of the São Miguel Paulista nickel and cobalt refinery in Brazil, the company said it was potentially on track to become the second largest producer of refined cobalt outside China.
Cobalt, an important mineral used in the manufacturing of electric cars, is mainly sourced from artisanal miners working in dangerous conditions in the Democratic Republic of Congo, and major automakers like Tesla have said they are working towards moving away from the metal’s usage for the same reason.
Click here for an interactive chart of cobalt prices
Yet, the metal remains integral to the manufacturing of electric vehicles. In the interim, cobalt demand is forecast to double between now and 2030, according to trade house Trafigura.
($1 = 1.3556 Australian dollars)
(By Soumyajit Saha; Editing by Subhranshu Sahu and Amy Caren Daniel)