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Critical minerals
Metal hedges usually leave the terms between mines, processors and refiners uncovered.
- Benchmark
- Cobalt metal price
- Carried by the business
- Cobalt hydroxide payable
- Settles on
- Price-reporting agency indicators
Illustrative exampleA refiner buying cobalt hydroxide
This hypothetical example uses public events and does not describe a client.
1
- 01The business
The refiner pays for hydroxide as a share of the cobalt metal price, and can hedge the metal itself.
- 02What happens
When a producing country restricts exports, as the Democratic Republic of the Congo did with cobalt in 2025, the payable can jump while the metal price barely moves.
- 03What the contract names
The contract names a published payable indicator for cobalt hydroxide, a twelve-month window settled monthly, and a strike on the payable.
- 04How it pays
If the monthly average payable rises above the strike, the contract pays a third of its maximum, rising to the full amount ten points higher.
Share of the maximum it pays
- 33%At the strike
- 67%+5 points
- 100%+10 points
Observed dataBenchmark history
These prices provide market context for the worked example.
2
Public benchmark
14,473USD per metric ton
+4,478 (+44.8%) over 12 months
International Monetary Fund, via FRED. Source checked Oct 31, 7:26 PM UTC.
Copper, global price: 9,995 on September 2025, 14,473 on September 2026. Low 9,995 on September 2025, high 14,473 on September 2026. Values in USD per metric ton.
This monthly global copper price does not measure cobalt, lithium or a processor’s terms for intermediate products.
View source dataIllustrative exampleWhere the hedge stops
This diagram illustrates how a business cost can move away from a benchmark; it does not show observed prices.
3
These curves illustrate a possible pattern and do not represent observed prices.
Illustrative drawing, not market data. Cobalt hydroxide payable against Cobalt metal price; the shaded gap between them is the spread. A faint band marks the window a contract would cover.
CoverageRisks we can structure
Contracts can address the following risks.
4
- 01Hydroxide and concentrate payables
- 02Treatment and refining charges
- 03Grade and penalty spreads
- 04Export quotas and bans
- 05Offtake price resets
The processFrom exposure to payment
We start with one business risk and assess whether we can define a contract around it.
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- 01
Define the exposure
Tell us the event, the place, the period, and what it costs the business.
- 02
Write the terms
Oros names the record, the trigger, the price, the payment, and the limit.
- 03
Find the capital
A counterparty takes the defined risk for a premium, with payment capped in the terms.
- 04
Settle on the record
As calculation agent, Oros applies the terms to the named record and states the result.
Discuss your business risk.
In a thirty-minute call, we can discuss what could change, where and when, and what it would cost your business.