Toronto-based First Cobalt is making a “friendly” play for fellow Canadian US Cobalt in a bid to secure more cobalt ground on a growing shortage of the battery metal.

The two companies have inked an all-scrip agreement that values US Cobalt at $C149.9 million ($146.9 million).

“We foresee a shortage of cobalt over the next five years, yet there are few companies doing significant work to identify new sources of supply,” First Cobalt (ASX:FCC) chief Trent Mell said.

Electric car makers are striking long-term deals with big battery makers, shoring up confidence among tech metal miners.

Cobalt is a critical component of lithium ion batteries but it’s difficult to get.

Almost all the world’s cobalt is the by-product of nickel and copper production and 60 per cent comes from the Democratic Republic of Congo, which has been blacklisted by some end-users over ethical issues surrounding the mining of the commodity.

US Cobalt is working toward a maiden resource for its North American projects, due out later this year.