Cobalt Holdings: what to expect from UK’s biggest IPO of 2025
A business backed by mining giant Glencore, due to begin trading on the London stock market on 5 June, has decided not to go ahead with the listing.
4th June 2025 21:00
by Graeme Evans from interactive investor
UPDATE: Cobalt Holdings has scrapped plans to list shares on the London Stock Exchange on 5 June, less than 24 hours before it was due to start trading.
In a short statement, the company gave no reason for the decision, although according to reports in the Financial Times, Cobalt's management decided it would be better to fund the business privately.
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ORIGINAL ARTICLE: A Glencore (LSE:GLEN)-backed IPO takes place tomorrow with the aim of replicating the stock market success of the £1 billion-valued uranium business Yellow Cake Ordinary Shares (LSE:YCA).
Cobalt Holdings, which has been created in order to purchase and hold the energy transition metal, is set to raise $230 million (£170 million) in what is the London’s market’s biggest flotation of the year and reportedly the biggest in the mining sector since 2018.
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Conditional dealings get under way at an issue price of $2.56 tomorrow (Thursday), before trading proper commences next Tuesday. Alongside institutions, the company has made some of the 90 million new shares available to retail investors.
Glencore is one of two cornerstone investors and has entered into a supply agreement that will give the newly listed company the right to purchase $200 million of cobalt metal in year one. This is followed by $160 million a year for the following five years, up to a total of $1 billion.
FTSE 100-listed Glencore will hold a 10% stake following the listing, alongside 9.5% stake for US investment firm Anchorage Capital.
Battery applications account for three-quarters of global cobalt consumption and are the dominant driver of market growth.
Cobalt is also found in the magnets used within turbine induction generators, while its ability to withstand high temperatures and resistance to corrosion make it a key element of applications in the aerospace and defence sector.
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Current oversupply in the cobalt market has presented the company with an opportunity to acquire the metal at below long-term average prices.
The price of cobalt has been close to $34,000 per tonne, well below the 2008 peak of $85,000 and forecasts of approximately $56,000 per tonne by 2034.
The company believes now is the right time to build a strategic stockpile, noting that demand for cobalt more than doubled between 2015 and 2024 and is expected to rise by more than 54% between 2024 and 2031.
In addition, the Democratic Republic of Congo (DRC) has just begun to impose export restrictions, reducing the metal’s supply.
Chief executive Jake Greenberg said: “We anticipate that supply and demand will come back into balance over the coming years and will create the necessary conditions to incentivise investment in new mines and refining capacity in the West, all of which are essential to deliver the energy transition.”
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Greenberg was part of the founding team of Yellow Cake, which in 2018 signed an agreement with Kazatomprom for an initial purchase of up to $170 million of uranium in year one followed by up to $100 million each year for the following nine years.
By 2024, uranium prices had increased by five times. The AIM-listed shares, which made their debut in July 2018’s $150 million flotation at a price of 200p, are just below 500p after topping 650p in early 2024.
The IPO documents for the Cobalt flotation highlight a number of risk factors, including the potential for the development and adoption of new battery technologies that rely on inputs other than cobalt compounds.
It adds that tariff wars and protectionist measures could threaten to reduce demand for cobalt, while jurisdictions for which the company is reliant on for supply chain purposes, such as the DRC, may be subject to policy or regulatory changes.
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