LONDON (Reuters) - A collapse in the price of battery metal cobalt has forced fledging producer Jervois Global Ltd to delist and reorganise, the firm said on Thursday, after struggling for years to compete with Chinese rivals.

The move highlights a glut in cobalt, a key ingredient in electric vehicle batteries, as dominant Chinese producers continue to pump out the material while EV sales have failed to meet bullish forecasts.

The price of cobalt, which is also used in electronics and a range of weapons, among other goods, has tumbled 72% since hitting a peak in April 2022.

The price of another Jervois product, nickel, has fallen by more than half over the past two years.

Jervois, which last year suspended final construction of what would be the only U.S. primary cobalt mine due to weak prices, will go private in a recapitalisation deal with U.S. fund manager Millstreet Capital Management.

Millstreet was a key lender to the company and will inject a further $145 million while Jervois will transfer its assets to a nominee of Millstreet, a statement said.

The deal will wipe out hundreds of millions of dollars of shareholders' investments. Its top two shareholders are Australia's largest pension fund and commodity trader Mercuria with stakes of 23% and 7.6%, LSEG data showed.

AustralianSuper's holding in Jervois almost tripled to roughly 400 million shares between June 2022 and June 2024, according to holdings data for its largest fund. Over the same period, the value of that shareholding fell to A$6 million from A$170 million.

AustralianSuper and Mercuria both declined to comment.

Jervois will continue to operate as normal during the recapitalisation process, which is expected to be completed before the end of April, including at its cobalt refinery in Finland and a nickel refinery in Brazil.

Jervois' U.S. cobalt mine is likely to remain mothballed until prices for the metal hit at least $20 per pound, roughly double current levels, a senior executive told Reuters last month.

The executive also said U.S. President-elect Donald Trump should deploy tariffs strategically rather than bluntly as he aims to support U.S. mining companies facing Chinese competition.

Jervois said last year that it had received $15 million from the U.S. Department of Defense, which was funding all of its drilling efforts at its Idaho cobalt mine.

(Additional reporting by Clara Denina in London and Lewis Jackson in Beijing; editing by Jason Neely)