Reuters UK- For years the preserve of globe-trotting merchants and secretive financiers, the trade in rare and valuable minerals known as minor metals is now on the radar of hedge funds searching forprofits.
Huge amounts of money have been ploughed into higher-profile commodities such as copper and oil since the start of the decade, but the outlook for less well-known metals is fundamentally very strong, traders and fund managers say.
Cobalt, a metal mined in countries including the Democratic Republic of Congo, Zambia and Russia for use in aerospace engineering and in power station components is increasingly popular.
Nick French, a cobalt dealer at London trading firm SFP Metals, said cobalt is attracting a lot of attention from the investment community.
“This year there has been hedge fund interest, the logic being that if you can push the price of cobalt up to $40 per lb from $20, then the share price of a cobalt mining company will double,” French said.
High-grade metal is trading around $30 per lb, up only slightly from the start of the year but more than 60 percent higher than its price in October 2006.
