DRC considers extending cobalt export suspension
The Democratic Republic of Congo (DRC) is considering extending its suspension of cobalt exports beyond the initial four-month period as part of a strategy to stabilize prices and strengthen control over the cobalt supply chain.
The suspension, which began on February 22, has already had a significant impact on the market, with cobalt prices rising more than 50% from a two-decade low. President Felix Tshisekedi stated that a detailed assessment will be conducted at the end of the four-month period to determine whether the suspension should continue or if other market-stabilizing measures, such as export quotas, should be introduced. The ultimate objective is to maintain market balance while encouraging domestic industrialization and value addition in the cobalt sector.
The sharp increase in cobalt prices, from below $10 per pound in February to $16.10 per pound as of Monday highlights the DRC’s dominant role in the global cobalt market. As the source of approximately 75% of the world’s cobalt, any disruption in supply from the DRC significantly impacts global prices.
Strategy
Increased production from China’s CMOC Group Ltd. in recent years had contributed to an oversupply, which drove prices down. The government’s decision to limit exports is now reversing that trend. President Tshisekedi emphasized that the Authority for the Regulation and Control of Strategic Mineral Substances’ Markets (ARECOMS) is the sole entity authorized to issue official statements on the matter.
The government’s strategy reflects a broader effort to exert greater influence over the cobalt value chain and capture more economic benefits from the country’s natural resources. By limiting supply through potential export quotas or an extended ban, the DRC aims to maintain higher prices and encourage local processing and manufacturing. Major cobalt producers in the DRC, including Glencore and Eurasian Resources Group, may need to adjust their operations and market strategies if the suspension is prolonged or if new regulatory measures are introduced. A sustained shift toward local industrialization could strengthen the DRC’s position in the global cobalt market while improving economic benefits for the country.
