(Bloomberg) -- Cobalt miner Jervois Global Ltd. will go private as part of a restructuring deal with one of its lenders, after struggling to compete with Chinese rivals as prices for the battery metal plunged.
The Australia-based miner, which owns the only cobalt mine in the US, said Thursday it plans to delist its shares in a recapitalization deal with fund manager Millstreet Capital Management. Millstreet will inject $145 million into the business while Jervois transfers its assets to a Millstreet nominee, the miner said.
Cobalt prices have plummeted over the past three years due to rising supply and a slowdown in demand growth. Jervois, which saw its shares fall 99% from its peak in 2022, previously cut jobs and mothballed its US cobalt mine in response to the commodity collapse, blaming the poor market conditions on Chinese overproduction of the metal.
The move further highlights the challenges facing the US and its allies as they seek to loosen China’s grip on cobalt and other critical minerals. Jervois spent $150 million to open its mine in Idaho — and received $15 million from the US Department of Defense — but was forced to halt construction in 2023, a matter of weeks before it was due to start up.
The embattled company said Thursday is has taken “significant diligence and negotiations with third parties, stakeholders and Millstreet in relation to the proposed recapitalization of the company’s balance sheet,” including potential asset sales and joint ventures.
“Due to several factors including the current cobalt price, which is, in real terms, at all-time lows, these negotiations have not resulted in a transaction,” the firm said.
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