Exclusive: U.S. nickel-cobalt miner Missouri Cobalt hires bank to go public through SPAC

TORONTO (Reuters) - U.S.-based nickel-cobalt miner Missouri Cobalt, LLC has hired Goldman Sachs to assess options, including a public listing through a blank-check company in a deal that could value the miner at up to $5 billion, two sources said on Friday.

A deal would underline growing interest by Wall Street in strategic minerals as President Joe Biden seeks to cut U.S. reliance on industry leader China for electric vehicle materials.

Blank-check firms known as special purpose acquisition companies, or SPACs, are listed shell companies that raise funds to acquire a private company and take it public, allowing targets to sidestep the more onerous regulatory checks required for an initial public offering.

U.S. rare earths miner MP Materials last year went public in a $1.47 billion SPAC merger while Canada’s DeepGreen Metals Inc in March said it would list through a merger with U.S.-based Sustainable Opportunities Acquisition Corp.

St. Louis-based Missouri Cobalt and Goldman declined to comment.

Missouri Cobalt bills itself as the only vertically integrated cobalt producer in North America. Former Glencore head Willy Srothotte is a director.

Its flagship Madison mine in Missouri is estimated to hold 72 million pounds of recoverable cobalt, 105 million pounds of nickel and 103 million pounds of copper, the company said.

In 1999, remediation began at the site - which held a mine that had closed - under the U.S. Environmental Protection Agency’s Superfund program, which is responsible for cleaning up certain toxic waste sites.

Funds would be used to scale up operations, which could include battery recycling and processing of third-party material, one of the sources said.

The sources spoke on condition of anonymity because the decision is not yet public.

Existing tailings and underground deposits are expected to yield total annual production of at least 5 million pounds of cobalt, 6 million pounds of nickel and 22 million pounds of copper by 2023, a company document seen by Reuters showed.

Construction of a hydrometallurgical facility for production of battery-grade cobalt and nickel is nearing completion, according to the document.

Reporting by Jeff Lewis; additional reporting by Ernest Scheyder in Houston; editing by Barbara Lewis