Jervois Global: Anatomy of a Commodity-Driven Chapter 11

Welcome to the 181st Pari Passu newsletter.

Last year, we explored the case of Enviva, a wood pellet producer whose exposure to volatile wood pellet spot pricing ultimately led to its downfall. Today, we are looking at a cobalt supplier that similarly suffered from macroeconomic headwinds, which catalyzed its fall into Chapter 11. 

What began as an unexpected drop in cobalt prices beginning in 2022 quickly snowballed into a liquidity crisis, as Jervois Global’s ambitious expansion strategies crashed with unfavorable market dynamics. The 70% cobalt pricing drop hurt the top line, at the same time as inflationary costs and heavy capex associated with two acquisitions were burning hundreds of millions of liquidity. With a combination of external shocks and internal commitments, Jervois Global presents a case where timing and inadequate risk management quickly turned against them.

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Jervois Global is a supplier of manufactured cobalt products, a hard, grey metal material used in the production of items like lithium batteries, hard metals, and high-strength superalloys. Its primary products are cobalt and nickel, specifically focusing on the production of cobalt products used for the chemical, catalyst, inorganic pigment, powder metallurgy, and battery industries [1]. The Company’s end products have a wide variety of commercial uses, including in the production of batteries, diamond tools, and hard metal applications, powder metallurgy, livestock feed, and specialty chemicals. Jervois Global generated $354mm in revenue at its peak in 2022, whereas in comparison, Glencore, the world’s largest cobalt supplier, generates ~$3bn in cobalt revenue [2], [3]. The predecessor to Jervois Global, Jervois Mining,  was incorporated in 1962 and headquartered in Australia, but had very different operations from the Jervois Global we know of today.

Jervois Mining was listed on the Australian Stock Exchange as early as 1980 (IPO details not disclosed), operating primarily in the Australian mining industry [4]. From 1962 to 2002, the company focused on mineral and resource exploration in Australia, mining raw materials like cobalt, copper, and gold. During this period, it also developed processes to refine its products and produce high-purity cobalt and chemical products [8]. Then, between 2002 and 2017, Jervois began to focus its operations on the Nico Young nickel cobalt project, located in New South Wales (NSW), Australia [4]. The site was a laterite deposit for mixed hydroxide precipitate (MHP) production, which is an intermediate raw material used in various chemical applications. The company was the sole license holder at the site, holding two exploration licenses.

Jervois Global completely shifted its strategic direction in 2017, when the board transitioned the company toward cobalt materials and the broader battery metals sector, citing the strong growth potential in the EV sector and the lithium-ion battery market [4]. In September 2017, they appointed Bryce Crocker, formerly of Xstrata and ANZ Investment Banking. Four directors resigned, and five more new directors were appointed, effectively shifting into the start of Jervois Global that we know of in its current form. Following this strategic shift, the company made a series of acquisitions across the United States, Finland, Brazil, and Australia, and these acquired assets now form the core of its operations. The Nico Young project, once the entire core operations of the business, was identified as a non-core asset. As a result, Jervois Global tried to divest it in Q2 2023, but ultimately, no transaction was completed [5]. The main acquired assets for its operations are: 

July 2019 - Idaho Cobalt Mine ($43mm, under development): Acquired the partially developed mine site in Idaho, and to date has invested $150mm into infrastructure development, including a water treatment facility and mining camp. The Idaho Cobalt Operations (ICO) represents the largest and highest-grade confirmed cobalt ore body (an area within the Earth’s crust that naturally accumulates cobalt due to earthly processes) in the United States, and once commissioned and operating, would become the country’s sole primary cobalt mine supply. Since acquiring ICO, Jervois Global has engaged with the United States government for programs, given cobalt’s strategic role in aerospace, defense, and energy transition applications. The Department of Defense subsequently provided $15mm in funding for mineral resource drilling and a feasibility study on domestic cobalt refining, which was originally expected to be completed in Q1 2025 [6]. However, in March 2023, Jervois had to halt the final construction of the mine and mineral processing facility due to its cash burn and distress [1]. 

August 2021 - Jervois Finland ($160mm, operating): Acquired Freeport Cobalt, which became their Finland operations and has remained their only operating segment (covered in detail in the next section). The primary asset consists of contractual rights to toll-refined cobalt, the operating refinery itself, and long-term cobalt hydroxide supply contracts. One highlight of the facility is that it holds refining capacity agreements with Umicore, one of the world’s ten largest producers of advanced materials (purchases refined cobalt and processes it into chemicals for batteries) [7]. 

July 2022 - São Miguel Paulista (SMP) Brazil Refinery ($22mm, non-operating): Acquired this non-operating refinery, which had been an operating company from 1981 to 2016 under a Brazilian conglomerate until it halted all operations due to the shutdown of nickel feedstock supply in Brazil [7]. After acquiring the site, Jervois conducted a feasibility study and confirmed their plans to invest in capex and eventually resume commercial operations.

In addition to these three acquisitions, Jervois Global also owns two non-core mineralization assets in Australia, primarily used for cobalt exploration. Taken all together, Jervois Global’s core asset base consists of: (1) the United States ICO mine development, (2) the Finland-based cobalt manufacturing facility, (3) the Sao Miguel Paulista refinery, and (4) the Australia cobalt deposits [1]. The non-core assets primarily consist of the mineral exploration in Australia. These core assets will be key in their out-of-court marketing efforts to sell assets and raise cash, which will be covered later on. 

As Jervois Global’s operational challenges are closely tied to the macroeconomic dynamics of the cobalt industry, it is first important to contextualize how the cobalt industry operates. Unlike metals such as copper or iron, cobalt is not mined on its own [9]. 98% of global cobalt supply is produced as a by-product of nickel or copper mining, so the control of these mines is critical to the industry [10]. Once these cobalt is extracted from raw mineral materials, they get processed for commercial uses, mainly categorized into three types of products: (1) lithium-ion batteries; (2) super alloys and magnetic materials, which are more heat resistant and stiff; (3) hard alloys. While (2) and (3) have a wide range of end market uses within industrials, the most significant driver of cobalt demand remains lithium-ion batteries. These batteries are predominantly used across EVs, Energy Storage Systems (ESS), and mobile electronics, and together compose more than 70% of cobalt demand in 2024. To contextualize, in the 1990s, batteries only represented 1% of cobalt demand, and had a ~15% CAGR since then to become over 70% of the current cobalt demand [9]. 

The flow from cobalt extraction to its end uses can be best understood through the cobalt value chain. At the upstream, mining companies like Jervois Global would extract cobalt (Jervois Global’s Idaho mine is cobalt native, whereas other companies like Kisanfu Mining have copper and nickel mines that produce cobalt as a by-product), and process it into saleable high-purity products. These products then move to the midstream, which has two stages of refinery. In the first refining process, companies like Jervois Global process extracted cobalt into higher purity versions, which their Finland and Brazil Refineries operate in. In the second refining process, companies like Umicore (the one mentioned that Jervois Finland has refining agreements with) and BASF purchase the refined cobalt and process it again into chemicals that form the active materials in lithium-ion batteries. Finally, moving to the downstream, battery manufacturers such as LG and Panasonic assemble cells and packs, which are then integrated into end products like electric vehicles, energy storage systems, and consumer electronics [11].

We should focus on the dynamics of the upstream cobalt mining industry, since it has the biggest influence on cobalt supply and subsequent pricing of cobalt products. The upstream segment is highly concentrated, both by geography and by competitors. By country, the Democratic Republic of the Congo (DRC) is the leading supplier, accounting for more than 70% of global cobalt production, with the second largest supplier, Russia, only supplying an additional 4% [12]. By company, the top three cobalt suppliers (CMOC, Glencore, and ERG), which all predominantly operate in the DRC, make up 85% of DRC cobalt exports as of 2024. [13]. The extent of geopolitical and supplier risks of cobalt is unseen in any other large-scale commodities. 

The extent of cobalt concentration in DRC also made Chinese mining companies very influential in the global cobalt supply chain, through investing in the DRC and opening up cobalt refineries. In fact, since the Sicomines Agreement in 2007, where the DRC provided cobalt mining concessions to China in exchange for infrastructure investment, most DRC mines have been owned by Chinese entities. For example, the CMOC Group, one of the three largest operators, owns the Tenke Fungurume cobalt mine in the DRC (globally the third largest cobalt mine) [21], which alone produces approximately 14% of the total global supply of cobalt [14]. China already processes 80% of global intermediates that produce cobalt products, and has expanded initiatives to control more of the cobalt value chain in its accelerated adoption of EVs. Due to this trend of intense investment by the largest cobalt suppliers like CMOC, global cobalt production more than doubled from 140k metric tons in 2020 to 290k metric tons in 2024 [15]. Due to these dynamics, the United States and the EU look to reduce dependence on China for critical commodities like cobalt. 

Understanding the global cobalt industry dynamics allows us to contextualize Jervois Global’s operations, which can be categorized into four main segments:

Mining Operations: Extracts cobalt and nickel raw materials from natural deposits.

Refining: Transforms raw materials into high-quality cobalt and nickel products through its company-owned refineries. These refineries process cobalt into forms suitable for high-performance batteries, hard metals, and other high-efficiency industrial applications. 

Chemical Production: Manufactures advanced cobalt and nickel chemicals for the use of lithium-ion batteries and other specialty chemical applications.

Project Development: Conduct feasibility studies for third parties to determine the viability of future mining and refining projects at specific sites. For example, the United States funded $15mm for Jervois Global to determine the viability of a domestic cobalt refinery. The United States Mine and Brazil Refinery contribute to this segment. 

Given that the Finland refinery is the only operating segment as of September 2025, Finland operations account for 99% of Jervois Global’s total revenue [16]. Meanwhile, the United States, Brazil, and Australian projects remain non-operating and continue to incur costs related to development, maintenance, and project planning, but expect to become operating in the future. 

The historical financials reflect Jervois Global’s acquisition-driven business model, with the 2021 revenue reflecting the impact of the Jervois Finland acquisition and the integration of its operations. Prior to 2020, Jervois Global was not subject to earnings disclosure requirements under the ASX, hence public financials start in 2020 and reflect the minimal revenue generation prior to their Finland acquisition. Together, the 2020 and 2021 pre-distress financials highlight a company still in an emerging phase, where significant capex across their non-operating sites contributes to modestly negative annual cash flows of ($13mm) in 2020 and ($38mm) in 2021. From a capital structure perspective, their reliance on debt to fund acquisitions and investments began to lever their balance sheet. In July 2021, Jervois Global raised $100mm in senior secured bonds to finance investments in its newly acquired United States refinery [17]. This was a substantial debt raise compared to their previous debt stack of solely the revolving facility.

While the earlier financials of Jervois Global reflected the costs of building out operational capacity and integrating their newly acquired assets at the time, the situation took a quick downturn as an unforeseen collapse in cobalt prices occurred. This sudden market downturn sharply reduced revenue and operational margins, triggering a deterioration in cash flow that ultimately set Jervois Global on its downward spiral toward a Chapter 11 filing.

The downfall of Jervois Global began with the sudden decline of cobalt prices, primarily driven by increased supply from international markets and further exacerbated by softer end market demands. Starting in 2022 and continuing into 2023 and 2024, cobalt prices plummeted due to a surge in production, mostly from the DRC [9]. Prices spiraled down approximately 70%, from a high of ~$82k per metric ton in May 2022 to around $25k per metric ton by December 2024 [18]. While supply surged significantly, the increase substantially outpaced the growth in demand from the primary end markets for cobalt, including electric vehicles and the chemical industry. While cobalt still remains a highly valuable resource for these end markets, for example for its role in extending EV battery life by 15 - 20%, the larger softness in these markets, driven by changing carbon regulations and consumer preferences, led to only moderate demand growth for cobalt products. The combination of rapidly accelerating supply and slower demand created a substantial inventory buildup and a pronounced supply-demand imbalance, leading to the rapid deterioration in cobalt prices.

For Jervois Global, the price shock was especially damaging because of the company’s pure play exposure to cobalt and the absence of a hedging strategy. As a commodity supplier, Jervois Global sold its output largely at prevailing quoted prices, leaving it fully exposed to volatility. The sales volumes being broadly stable, from 5.6k metric tons in 2021, 5.3k in 2022, to 5.4k in 2023, speak to how the sharp decline in pricing directly translated into weaker revenues. This revenue compression was also met with rising operational costs, including inflationary increases in construction costs and higher energy prices, putting further pressure on both gross and EBITDA margins. This combination of declining pricing and elevated costs led to negative EBITDA generation of ($41mm) in 2022 and ($44mm) in 2023, signaling the initiation of operational challenges and cash burn. 

Beyond the primary driver of distress being an unfavorable pricing environment and significant cash burn, the timing of Jervois Global’s United States and Brazil acquisitions, as well as the accompanying need for substantial capital expenditures, added fuel to the fire. With the acquisitions occurring in July 2019 and July 2022, respectively, the company faced significant capex requirements to progress on making both sites operational. Over 2022 and 2023, Jervois Global spent more than $200mm on these two projects. Yet with cobalt prices continuing to collapse, they could not sustain the level of investment.  The continued cash burn made Jervois Global pause investments on the Brazil refinery, leaving it unable to contribute to revenue while continuing to consume cash for maintenance costs. This further strained cash flows, which had been negative for four consecutive years and had accumulated to approximately $400mm by the end of 2023.

To mitigate the cash drain, Jervois Global turned to capital markets for funding. In June 2023, Jervois Global announced a $50mm capital raise, comprised of two tranches of July 2028 unsecured convertible notes totalling $25mm ($27mm by filing date as shown below due to PIK interest accrual), as well as a $25mm entitlement offer conducted in parallel. This capital raise provided short-term liquidity relief while management explored strategic options, but it did not address the structural friction between collapsing revenue and heavy spending needs. 

On top of operational cash burn, looming debt maturity walls further increased the urgency for Jervois Global to turn things around. Although the company still had over $100mm of revolver capacity available in 2024, it faced near-term maturities that created a highly compressed timeline for addressing its obligations: the ICO bond had an interest payment due in July 2024, followed by the revolver and term loan maturities in March 2025. The combination of operational losses, substantial capex requirements, and upcoming debt maturities put Jervois Global in a tight position to address its problems.  

Facing ongoing pressures from falling cobalt prices and with looming debt maturities, Jervois Global initiated a series of turnaround measures aimed at buying breathing room and turning things around without filing. Jervois Global began engaging third parties to explore potential asset sales or partnerships across its key acquired non-operating assets (the Idaho Mine, the Brazil Refinery, and the Australia Nickel and Cobalt Refinery) [1]. Despite these efforts, the company did not receive any formal proposals for the sale of these assets.

Throughout 2024, Jervois Global decided to launch a subsequent marketing process, this time aimed at soliciting merger or corporate sale opportunities, rather than the failed standalone asset sales. However, even with the Finland operations offered for sale, this second round of outreach also failed to generate formal proposals, leaving the company with continuing cash burn from operations and debt maturities in 2025 on the horizon [1]. With these operational pressures compounding and maturity walls upcoming, a financial restructuring began to look like the most viable solution. Throughout 2024, equity markets reflected these risks: Jervois Global’s stock pricing progressively declined to a $386mm market cap due to the likelihood of a filing and a potential wipeout of existing equity, a stark contrast from its peak of $1.4bn in April 2022. 

In April 2024, Jervois Global engaged Moelis and began discussions with Millstreet Capital Management, an events-driven hedge fund focused on high-yield debt investing [19]. At this time, Millstreet was the sole lender for the company’s convertible notes and the majority holder of ICO bonds. By July 2024, Millstreet further increased its position in the company by acquiring the debt and becoming the sole lender of the JFO Facility (revolver and term loan). It became clear that the fund’s strategic objective was to acquire the ownership of Jervois Global post-restructuring, and, as a result, they provided a series of measures to support continued operations. These included amendments and waivers of covenants under both the JFO Facility and ICO bonds, as well as a deferral of interest payments under the ICO bonds, pushing the original July 2024 interest payment to December 2024 [1]. To further provide breathing room, Millstreet also extended additional loans totaling $32mm across September and November 2024.

With Millstreet’s extensive support, Jervois Global then focused on its efforts to pursue a prepackaged Chapter 11 filing, confirming its RSA on December 31st, 2024. This RSA was amended and restated immediately prior to filing on January 28th, 2025, to include the additional lender PenderFund Capital Management. Together, the two lenders held 100% of prepetition JFO Facility claims and convertible notes, as well as 96% of prepetition ICO bonds [1]. With support from such a high level of creditor participation, Jervois Global filed for Chapter 11 on January 28th, 2025.

The RSA that Jervois Global entered into at the time of its Chapter 11 filing outlined several key provisions designed to achieve an efficient in-court financial restructuring. Key components of the RSA included:

(1) Support and votes in favor of the debtors’ Chapter 11, where general unsecured creditors were unimpaired, equity holders were cancelled, $13mm of the prepetition revolver was repaid in cash, and the remaining $32mm balance was rolled into an exit revolver. The prepetition bonds and convertible notes were equitized, providing holders with 40% and 2%, respectively, of the post-reorganization equity. 

(2) A $49mm DIP facility, composed of a $25mm new money term loan and a $24mm roll-up of the prepetition term loan. The DIP carried interest at SOFR + 5% and included a commitment premium and an exit commitment premium. 

(3) A $90mm new money investment, where Millstreet would receive 51% of the post-reorganization equity on the plan’s effective date.

(4) A commitment from Millstreet to provide an additional $55mm in equity financing post-emergence, to be used to restart the Brazil refinery, with its production and sales projected to begin in Q4 2026.

The impaired classes eligible to vote on the Chapter 11 plan included the JFO Revolver Claims, ICO Bond Claims, and Convertible Note Claims. As a reminder, the RSA parties, Millstreet and PenderFund, held 100% of the JFO Revolver Claims, 100% of the Convertible Note Claims, and 96% of the ICO Bond Claims. This near-complete participation facilitated plan confirmation and minimized the risk of dissent. As a result, the Chapter 11 proceeding was designed to have an accelerated timeline, targeting confirmation of the plan within 40 days and aiming for emergence by April 30th 2025. Other creditors within general unsecured claims (GUCs) were not anticipated to pose issues and delay the timing; in this case, GUCs were composed primarily of trade vendors and suppliers, and they were expected to be paid in full or to have their contracts maintained throughout the bankruptcy process. 

With this, Jervois Global successfully emerged from Chapter 11 on May 9th, 2025, which is the point at which it officially became a reorganized entity under the terms of the confirmed plan. Under their confirmed plan, the prepetition revolver was to be repaid in full, ICO Bond Claims were projected to recover between 27% and 57% from receiving 40% of post-reorganization equity, and Convertible Note holders were projected to recover 6% to 13% from receiving 2.4% of post-reorganization equity. GUCs recovered 100%. Overall, the prepack Chapter 11 reduced Jervois Global’s debt by $164mm. 

This transaction effectively reduced Jervois Global’s debt burden by 84%, leaving only a revolver in its capital structure post-transaction. As a result, the company significantly lowered its aggregate maturity obligations and deferred the need to address debt maturities by one year, easing near-term liquidity pressures. Additionally, Millstreet injected $145mm in capital to ensure the company remained well-capitalized for ongoing operations [1]. 

With Millstreet and PenderFund taking the keys to the business, the future of Jervois Global remains highly dependent on a range of external factors. Of which, the most critical variable is likely the trajectory of cobalt pricing. After years of decline from 2022 to 2024, cobalt prices began to rebound in 2025, surging almost 50% following the DRC announcement of an export ban in February 2025 [20]. This was the first-ever DRC policy intervention in the cobalt market, and given that the DRC accounts for roughly 70% of global cobalt supply, any export restrictions materially impact global pricing. While this export ban has lifted prices in the short term, similar supply shocks or geopolitical events could create sudden price swings in either direction. This unpredictability highlights the need for Jervois Global to consider whether it can implement hedging strategies or contractual protections that would mitigate its revenue risks from severe commodity-driven shocks, especially as the cobalt pricing collapse was the primary factor that drove the company into bankruptcy in the first place. 

Looking at the debtor’s financial projections, it assumes a meaningful recovery in operations and revenues. Sales are expected to nearly double from 2025 to 2026, and again from 2026 to 2027. These projections assume that all near-term revenue will continue to be generated from the Finland facility through Q3 2026, followed by a restart of the Brazilian refinery in Q4 2026 and, later, the restart of the ICO mine in the United States in Q1 2028. From a pricing perspective, the revenue forecasts are based on Wall Street consensus cobalt pricing. However, given the volatility already demonstrated in cobalt markets, it will be worth looking out for whether Jervois Global explores other strategies to mitigate its dependence on cobalt spot prices.

Jervois Global’s case highlights how sudden macroeconomic shifts and supply-demand imbalances in a highly concentrated commodity market can quickly destabilize operations. Going forward, the company’s success will depend not just on the bounce back in cobalt pricing, but more so on its ability to actively manage pricing risk and prevent a repeat of the events that ultimately led to its restructuring.

This write-up draws on publicly available sources and our independent analysis to present estimates as part of a complete picture. These figures should not be interpreted as company disclosures.

This analysis is provided for informational and educational purposes only and does not constitute investment advice, legal advice, tax advice, or a recommendation to buy, sell, or hold any security. The content reflects the author's opinions and estimates based on available information and should not be relied upon as the sole basis for any investment or legal decision. Readers should conduct their own due diligence and consult with qualified financial, legal, and tax advisors before making any investment decisions. Past performance and historical analysis do not guarantee future results.