TORONTO - First Cobalt Corp. says it will take over US Cobalt Inc. in an all-share deal valued at $150 million as it looks to add to its supply of the industrial metal ahead of increased demand.
The friendly deal, which requires approval by US Cobalt shareholders, comes as growing investments and demand in electric vehicles has spurred interest in key metals like cobalt, used in the vehicle's battery packs.
As a result, cobalt prices have more than doubled since the start of last year.
First Cobalt says the acquisition will help it position itself as a North American-focused cobalt company, as buyers of the metal look to diversify from a widespread reliance on production in the Democratic Republic of the Congo where human rights groups have raised concerns of child labour in mining operations.
The company says US Cobalt's flagship project in Idaho, as well as lithium projects in Utah and Alberta, will complement its own cobalt projects and refinery in Ontario.
The rise in cobalt prices has prompted other Canadian mining companies to push ahead on cobalt-related projects sitting on their books, including RNC Minerals looking to spur development of its Dumont nickel-cobalt project in Quebec and Fortune Minerals looking to breath new life into its project in the Northwest Territories.
Brazilian miner Vale S.A. already produces cobalt in Canada as part of a nickel concentrate from its Voisey's Bay mine in Labrador, while Agnico Eagle Mines Ltd. owns dormant cobalt-related assets in northern Ontario.
Companies in this story: (TSXV:FCC) (TSXV:USCO) (TSX:FT) (TSX:RNX) (TSX:AEM)
The Canadian Press