DRC Weighs Cobalt Export Quotas to Stabilize Prices
The Democratic Republic of Congo (DRC) is considering introducing cobalt export quotas in an effort to curb oversupply and support prices.
As the world’s largest supplier of cobalt, the country is seeking to counter historically low prices caused by sluggish demand from automakers and increased copper production, which yields cobalt as a by-product.
The Congolese government has discussed implementing export limits, though no final decision has been made. Earlier this week, authorities imposed a four-month export ban to address the supply glut.
The ban, announced by the Authority for the Regulation and Control of Strategic Mineral Substances’ Markets (ARECOMS), will be reviewed after three months, with the possibility of modification or termination based on its impact.
Despite this move, analysts believe that a short-term export suspension may not be enough to stabilize the market. Once the ban is lifted, stockpiled cobalt could flood back in, further depressing prices.
Government officials are expected to negotiate export quotas with mining companies during the suspension period.
Previous attempts by the Congolese government to convince mining firms to voluntarily limit exports have been unsuccessful. State-owned Gécamines reportedly tried to negotiate market controls with China’s CMOC Group, but those efforts failed.
Meanwhile, CMOC, the world’s largest cobalt producer, more than doubled its output last year, reaching approximately 114,000 metric tons, driven by expanded copper production at its Tenke Fungurume and Kisanfu mines.
The company has stated that the temporary export ban has not impacted operations and does not expect a significant effect on business performance.
Other major cobalt producers in DRC, including Eurasian Resources Group and Glencore, have declined to comment on the situation.
Cobalt prices have plunged from $82,000 per metric ton in April 2022 to $21,000 per ton, the lowest level since the London Metal Exchange (LME) contract was introduced in 2010.
The ban is expected to remove approximately 65,000 tons of cobalt from the market, potentially causing a short-term price surge. However, mining companies will likely continue stockpiling, limiting any long-term impact.
Given the ongoing challenges, analysts predict that further supply controls, including export or production quotas, could be introduced in the near future.
