DRC attempts to address surplus cobalt supply, declining price with export ban

The Democratic Republic of Congo will halt cobalt exports for at least four months to tackle surplus supply and declining prices for the battery metal, a government official confirmed Feb. 25.

"The four-month ban applies to all mining operations in cobalt and is aimed at stabilizing the markets and formalizing the artisanal sector," member of the National Assembly, Patrick Muyaya Katembwe, said in a telephone interview.

The decree issued by the Authority for the Regulation and Control of Strategic Mineral Substances' Markets, or ARECOMS, seen by Platts, part of S&P Global Commodity Insights, stated that the export ban would be reassessed in three months from Feb. 22.

The country produces around 70% of the world's supply, with around 11.4 million mt of cobalt reserves.

Europe-based market participants largely agreed there was little to no effect on cobalt metal prices Feb. 24-25.

Platts assessed cobalt hydroxide CIF China at $5.60/lb on Feb. 25, flat day over day and week over week.

"Short term, it might lead to some tightness, but what it does do is just alter where the stocks are being built up – instead of Chinese warehouses it will be stockpiled in the DRC waiting for the ban to be lifted," said a Europe-based trader.

"It's a byproduct; they can't just stop copper production, and units will still accumulate."

CMOC Group, now the largest cobalt producer globally, achieved record production of 114,165 mt in 2024, up 105.6% year over year. It expects to produce 100,000-120,000 mt of cobalt in 2025.

Another large cobalt producer, Glencore, declined to comment on the ban.

'Own goal'

"It doesn't come as a complete surprise as it was clear that the DRC government was thinking of ways to address the problem of surplus supply and price pressure, but it's a measure that doesn't fundamentally change anything now," said a Europe-based trader.

Sentiment in the cobalt metal market was mixed.

"This is definitely not going to help the cobalt market because this is an export ban, not a production limit," said an analyst at a leading cobalt hydroxide producer. "This makes cobalt from the DRC look unreliable because of the uncertainty."

Another market participant agreed, telling Platts that "it's a DRC own goal and a further reminder that the DRC is a massive risk."

One Europe-based trader said some market participants may increase offer levels for metal on the news: "I can certainly see how some would use it to justify a bullish market sentiment."

In China, one cobalt metal producer said: "The problem is that if the export stops, but the production does not stop, the price will still be a mess. I expect cobalt prices to hold up for a while because of this news."

"No one's offering cobalt at the moment," a China-based trader said.

Growth in Indonesian supply

Meanwhile, Indonesia is expected to play a larger part in cobalt supply, with reserves of 2.285 million mt, second only to the DRC.

In 2024, cobalt supply from Indonesia is estimated to have increased by 50.7% year over year, reaching 32,446 mt, according to the January 2025 Commodity Briefing Service Plus report by S&P Global Commodity Insights.

The growth is due to ongoing expansions, which are part-funded by China-origin investments, like the PT Halmahera Persada Lygend's phase 3 operation, which reached full capacity of 14,250 mt in September 2024.

Lygend cobalt cathodes were heard trading in the European and US spot markets at $9.50-$10.50/lb on an IW Rotterdam and EXW Baltimore basis.

Meanwhile, PT QMB New Energy Materials, which opened its phase 2 operation in September 2024, is expected to increase the company's total cobalt capacity to 7,000 mt.

Platts assessed European cobalt metal Mixed-Use Basket A at $9.50/lb IW Rotterdam on Feb. 24, flat day over day but down 15 cents week over week.