MELBOURNE (Reuters) - Australia’s Jervois Mining has bought almost 5 percent of shares in Ecobalt Solutions Inc (ECS.TO), which is developing a high grade cobalt mine in the United States, days after two of its biggest shareholders called for management overhaul.
Jervois Mining has bought about 4.54 percent of shares in the company, it said in a filing to the Australian Securities Exchange on Monday.
The purchase suggests a bidding war may be beginning for one of a handful of projects outside the Democratic Republic of Congo (DRC) which are close to starting production of cobalt, which is in hot demand for use in rechargeable batteries.
“Jervois acquired shares in Ecobalt to facilitate discussing how it may support Ecobalt’s board and management in the financing, construction and successful commissioning of Ecobalt’s advanced primary cobalt development project in the United States,” Jervois said in a statement.
Ecobalt owns 100 percent of the Idaho Cobalt project, a high grade cobalt deposit with a partially completed mine site and mill, and which has full environmental permitting in what Jervois called “the only near-term domestic cobalt production potential in the United States”.
Demand for cobalt is soaring for use in batteries for electric vehicles, but around two thirds of the world’s supply comes from the DRC which has been tarnished by child labor and political risk concerns.
President Donald Trump has also put cobalt on a list of critical minerals that the United States will prioritize developing at home.
Two large shareholders, Australia-based funds Tribeca Investment Partners and Regal Funds Management last week called for management change at Ecobalt or the launch of a sales process, saying ongoing mine development delays were wasting a windfall from high battery sector demand.
Reporting by Melanie Burton; Editing by Eric Meijer