London-listed miner Anglo-Pacific has today made its first push into cobalt with the $205m (£144.9m) acquisition of a share in a commodity stream at a mine in Canada.
Under the deal, the firm will take control of a holding company that holds a 70 per cent interest in cobalt streams from the mine at Voisey Bay in Labrador.
Shares in the firm fell 4.0 per cent after the deal was announced.
The purchase marks a shift in Anglo-Pacific’s strategy towards a focus on the minerals and metals that will be vital for the 21st century.
Demand growth for cobalt, which is crucial for new technologies such as electric cars, is expected to explode in the coming years.
The Voisey Bay mine will give the company access to one of the world’s largest deposits of cobalt outside the Democratic Republic of Congo.
Anglo-Pacific said that the deal mean that its portfolio was now 61 per cent attributable to battery related minerals.
The new asset stream will also reduce the company’s exposure to increasingly unpopular commodities such as coal.
Chief executive Julian Treger said: “I am extremely pleased to be able to announce the acquisition of this Voisey’s Bay cobalt stream.
“It will provide a significant long-life income source for Anglo Pacific and materially progresses our ambition to focus on 21st century commodities that support a more sustainable world.
“We believe that this transaction largely solves Anglo Pacific’s two major strategic challenges: it addresses the medium-term declining income at Kestrel and significantly repositions the Company’s portfolio away from coal.
“We are delivering on our promise to recycle our short-term coal cash flow into clean commodities whose use is largely in facilitating cleaner energy and technology. The acquisition of this new cornerstone asset will underpin Anglo Pacific’s ability to deliver further growth and sustainable future returns for our shareholders.”