AustralianSuper Faces Losses as Jervois Global Recapitalizes

Australia's largest superannuation fund, AustralianSuper, along with other shareholders, will lose their investments after cobalt producer Jervois Global announced a $233.5 million recapitalisation deal with its major US lender, Millstreet Capital Management. This deal, structured under US Bankruptcy Code's Chapter 11, results in Jervois becoming privately owned and leaving shareholders with no returns. The drop in cobalt prices in 2024, driven by an oversupply due to Chinese production in the Democratic Republic of Congo, significantly impacted Jervois’s financial stability. Despite efforts and interim funding from Millstreet, negotiations for more favorable transactions or partnerships failed. The debt-laden Jervois holds assets including refineries in Finland and Brazil, and a cobalt deposit in Idaho, but the recapitalisation plan will reduce its debt significantly, enabling future operations. The agreement underscores the challenges faced by Western entities in the cobalt market amidst China's dominance in critical minerals and efforts by entities like the US to counteract such influence.