💥New Chapter 11 Bankruptcy Filing - Jervois Texas LLC💥
Miner succumbs to plummeting cobalt prices.
On January 28, 2025, Jervois Texas, LLC (“Jervois Texas”), Melbourne, AUS-based Jervois Global Limited ($JRV.V) (“Jervois Global”) and six other affiliates (collectively and together with Jervois Texas and Jervois Global, the “debtors” and together with their non-debtor affiliates, the “company”) filed prepackaged chapter 11 cases in the Southern District of Texas (Judge Lopez).* The company is “a leading global supplier of advanced manufactured cobalt products, serving customers in the powder metallurgy, battery, and chemical industries” and, reminding us to never miss an opportunity to self-aggrandize, proclaims to be “an industry leader in responsible sourcing and environmental performance[.]” We’re not sure how that’s relevant to first-day relief, but sure, good on ya, mates.
For those not in the know, it’s rough times in cobalt. Prices have plummeted ~74% from a May ‘22 high of ~$82,000/metric ton to ~$21,550 today, which the company attributes to “significant additional supply from Chinese-owned mines in the Democratic Republic of the Congo.” Just the Chinese-owned ones though. Snark aside, pricing is the culprit behind the debtors’ woes.
Because cobalt is a commodity, the company’s stock price has been a more-jagged-but-still-damn-close carbon copy of that nosedive.
With the writing on the wall, an upcoming July ‘24 bond payment, and March ‘25 revolver and term loan maturities, the company knew early on it had heaps of work ahead of it.
In Q2 ‘23, it began discussions with third parties that had expressed an interest in partnership opportunities or the company’s asset base, which primarily consist of (i) a non-operational mine development in Idaho acquired in July ‘19, (ii) an operating cobalt manufacturing facility in Kokkola, Finland acquired in ‘21, and (iii) a non-operational nickel and cobalt electrolytic refinery in São Paulo, Brazil acquired in July ‘22, as well as a non-core nickel and cobalt deposit in New South Wales, Australia.** But as luck would have it, not a single bloke or sheila submitted an actionable proposal, so in early ‘24, the company put “strategic transactions across the Company’s business segments, including through a merger or Company sale” on the table. Truthfully, we’re not entirely clear on how that’s substantively any different from what the company had already been doing, but no harm, no foul because it also resulted in diddly squat.