[SMM Analysis] DRC Bans Cobalt Ore Exports, Could Indonesia Become the Biggest Beneficiary?

Below, we briefly discuss Indonesia's strategic opportunities under the DRC export ban.

1. Price Transmission Mechanism Under Policy Impact

The world's largest cobalt supplier, the DRC, announced a four-month suspension of cobalt exports to address the persistent low cobalt prices caused by a supply surplus in the international market. The expected supply contraction has already had a noticeable market effect.

1. Spot Price Transmission: Following the announcement of the ban, the selling price of cobalt in the spot market surged, significantly boosting the profit margins of cobalt producers. Since the policy announcement to date, the average price of SMM cobalt sulphate has risen by 31% MoM. Additionally, the price and coefficient of cobalt in Indonesian MHP increased by 5 percentage points, driving higher profits for MHP producers.

2. Increased Optimism for Upcoming Indonesian MHP Projects: The upward shift in the cobalt price center is likely to stimulate enthusiasm for the construction of Indonesian MHP projects.

2. Structural Reshaping of the Global Market Landscape

1. Impact on DRC Supply: Based on the 2024 cobalt export volume from the DRC, the four-month suspension corresponds to 60,000 mt of refined cobalt.

2. Indonesia's Substitution Capacity: In terms of MHP production, according to SMM processing data, Indonesia's MHP production in 2024 is approximately 315,000 mt (Ni contained), with cobalt content around 35,000 mt (metal content). Considering new project commissioning and capacity release, Indonesia's MHP production in 2025 is expected to reach approximately 447,000 mt (Ni contained), with cobalt content around 50,000 mt (metal content).

SMM will continue to monitor subsequent market changes.

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