LONDON: Trading firm Traxys has won a tender to sell cobalt metal for Wheaton Precious Metals, two sources familiar with the matter said, in a deal that propels it into the big league to rival the likes of Glencore in the valuable commodity.
Two years ago, Toronto-listed Wheaton agreed a deal that would give it access to substantial volumes of metal from January 2021 at a significant discount to the market price.
Cobalt metal is used in corrosion-resistant alloys that keep their strength at high temperatures. They are typically used to make jet engines, gas turbines and speciality steels.
Cobalt hydroxide, which is produced separately, is commonly used for electric-vehicle batteries.
Because Wheaton doesn't trade physical commodities, it sent out a tender to more than 10 commodity traders in April to sell between 50 and 75 tonnes of cobalt metal a month in 2021-2022 and between 75 and 100 tonnes a month from 2023.
Using London Metal Exchange prices, 75 tonnes of cobalt would be valued at around $2.5 million.
"Wheaton doesn't have the infrastructure to market the cobalt and Traxys does, it has been selling Vale's cobalt under a contract which expires in December," one source said, adding that the new deal was for up to five years.-Reuters
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