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A streaming deal for cobalt and nickel from a mine in Papua New Guinea may foreshadow other similar arrangements as producers look to capitalize on the battery-commodity boom to raise cash for investments.

On Tuesday, Cobalt 27 Capital Corp. -- a Toronto-listed vehicle designed to invest in the metal -- said it reached a $113-million deal with Highlands Pacific Ltd. to buy future production from the Ramu mine in PNG. The Australian-listed miner’s shares surged as much as 56 per cent Wednesday in Sydney.

Cobalt is a key ingredient in lithium-ion batteries. But it’s often found as a minor byproduct of copper and nickel mining, and only a few places produce meaningful quantities. More than half of global supply comes from the Democratic Republic of Congo, an impoverished country beset by corruption scandals and political unrest.

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That’s bringing streaming arrangements into focus at non-Congo mines.

Vale SA is tendering its cobalt output from its Voisey’s Bay mine, and Sherritt International Corp. has said it’s been fielding offers from investors looking for a share of its production in Cuba and Madagascar. Canadian gold producer Agnico Eagle Mines Ltd. is dusting off idled silver-and-cobalt mines for a potential sale, after receiving inquiries.

For Vale, a cobalt stream at the eastern Canadian mine may be the only sensible way to fund a switch to underground operations, although the company is exploring other options as well, Chief Executive Officer Fabio Schvartsman said in an interview from Bloomberg’s New York headquarters last week.

In a streaming deal, an investor provides upfront funding to miners in exchange for a share of their future output. Historically, they have tended to be for precious metals like gold and silver, but the boom in cobalt prices has added a new commodity to the mix.

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