DRC’s Cobalt Prices Plunge Despite Global Supply Dominance
The Democratic Republic of Congo (DRC), renowned for supplying 70% of the world’s cobalt, confronts a significant downturn in cobalt prices.
Finance Minister Nicolas Kazadi highlighted the staggering drop in cobalt prices from $81,000 to $31,000 per tonne within a year, expressing deep concerns about this drastic plunge.
As of November 23, 2023, copper prices surged by 2.27% to $8,306.35 per tonne. In contrast, cobalt prices experienced a slight 0.03% decline, reaching $32,737.31 per tonne, according to the Central Bank of Congo (BCC).
Minister Kazadi stressed the challenge the DRC faces in influencing the cobalt market despite its dominant supply position.
He emphasized the urgent need for better organization within the cobalt market, lamenting the current imbalance where the majority of value addition in cobalt benefits those processing it rather than local producers.
The minister highlighted the discrepancy in cobalt transactions, noting that buyers within the DRC are often the ones processing the mineral outside the country. This perpetuates a cycle where low purchase prices locally lead to substantial profits during processing and international sale, with local value left unrealized.
Advocating for local cobalt processing, Minister Kazadi urged for the mineral’s transformation within the country to ensure that added value benefits the DRC.
He underscored the government’s commitment to reforming and regulating the cobalt sector, drawing a parallel with OPEC’s influence on oil prices despite a minority share in production. Reforms aim to better structure and oversee the cobalt industry in the DRC.
Notable mining entities operating in cobalt extraction in the DRC include Glencore in the southeastern region, alongside China Molybdenum (CMOC), ERG (Eurasian Resources Group), Huayou Cobalt, and Gécamines.
This scenario highlights the challenges faced by the DRC in maximizing the value of its mineral resources and asserting control over international cobalt market prices.
