Lower cobalt price makes it difficult to reach annual budget allocations | DRC
In the face of the downward trend in the price of cobalt, the chances for the Democratic Republic of Congo (DRC) to achieve are diminishing, as much of its revenue comes from mineral resources.
The sale of cobalt is an important part of the budget forecast. Hence the need to internalize prudential management of state resources.
Internationally, the price of cobalt has been falling for several months. At the root of this downward trend is the decline in sales of electric vehicles.
According to experts, this downward trend is expected to continue due to the slowdown in demand in the aeronautics sector where the metal is used for turbine blades in reactors.
Statistics show that the price of cobalt has fallen by 15% since February 2020 to around US$30,000 per tonne.
Demand from the aerospace sector is projected to be 4,442 tonnes this year, down by 18% from 2019.
With such prospects, it is the DRC, the world’s largest producer, that has new reasons to worry at a time when its economy is already hard hit by the health crisis.
The days when the metal was trading at US$90,000 per tonne now seems quite far away.
The DRC is the world’s largest producer of cobalt (60% of the world’s reserves) with 74,000 tonnes (2018) Cobalt is a strategic ore (associated with copper or nickel) used to manufacture automotive batteries and is exported almost entirely to China.
Soaring prices in 2016, 2017 and 2018 had led to a rush of cobalt diggers (200,000 according to Trafigura) that would supply between 20 and 40% of the cobalt produced in the DRC.
