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Madagascan miner Ambatovy has agreed a deal for Britain-based Stratton Metals to market its cobalt in the U.S. and Europe, two sources with direct knowledge of the matter said, surprising the market which had expected Sumitomo Corp to keep the contract.
Ambatovy produces nickel and cobalt briquettes, easily crushed into small particles and dissolved in sulphuric acid to make sulphates, used to make the lithium-ion batteries that power electric vehicles.
It was not immediately clear what prompted Ambatovy to switch to Stratton for the three-year contract from next January to sell about two-thirds of its cobalt output – between 3,500 and 4,000 tonnes annually – in the two regions.
Japan’s Sumitomo Corp, with a 54.17% stake in Ambatovy, now has the contract to sell the cobalt in the United States and Europe. State-owned Korea Resources Corporation owns the rest of Ambatovy.
One trading source said the tender went out in January to several commodity trading firms.
Sumitomo confirmed to Reuters that Ambatovy had agreed a deal with Stratton Metals to market the mine’s cobalt, but declined further comment.
Korea Resources Corporation and Stratton Metals declined to comment. Ambatovy did not respond to requests for comment.
“Sumitomo has a team specifically focused on selling Ambatovy’s cobalt to consumers in the United States and Europe,” one cobalt trading source said.
“Why would Ambatovy suddenly decide they were going to have a tender? It’s a puzzle.”
It was not known what commission Stratton would receive.
Ambatovy resumed operations on March 23 this year after a shutdown in March 2020 because of the covid-19 pandemic. It has the capacity to produce 5,600 tonnes of cobalt and 60,000 tonnes of nickel.
Ambatovy will market the remaining third of its cobalt output to Asia.
Cobalt prices at more than $50,000 a tonne have climbed more than 70% over the last 12 months.
(By Pratima Desai and Aaron Sheldrick; Editing by Clarence Fernandez)
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