DRC Plans to Strengthen Cobalt Export Ban or Cooperate with Indonesia to Control Supply

According to media reports, the DRC is considering measures to strengthen the temporary ban on cobalt exports, including cooperation with Indonesia, the world's second-largest cobalt supplier.

At the end of February this year, the DRC government suddenly announced a four-month suspension of cobalt exports to address the price slump caused by a supply surplus in the market. At the time, the country stated that the ban would be reviewed after three months and could be modified or lifted based on the results.

The DRC is the world's largest cobalt producer, accounting for more than three-quarters of global cobalt production. In recent years, the DRC's copper exports have also been steadily increasing.

Due to weak demand from automakers and miners ramping up copper extraction, cobalt prices have remained at historically low levels for an extended period. Cobalt produced in the DRC is a byproduct extracted from copper.

After the DRC suspended exports, cobalt prices rebounded from historical lows. However, analysts believe the temporary ban is unlikely to have a lasting impact on prices, and cobalt prices are expected to weaken further after companies release inventory metals.

Cobalt is one of the key metals for achieving the energy transition and is widely used in manufacturing EV batteries. Additionally, cobalt is required for producing aerospace components, radar, and guidance systems.

The DRC government is considering long-term policies to enhance the added value of cobalt extraction and processing and to prevent a flood of inventory cobalt into the market after the ban is lifted, which could impact prices.

According to a cabinet meeting memo dated March 14, the Economic Situation Committee, led by DRC Prime Minister Judith Suminwa Tuluka, proposed a series of recommendations to "effectively manage" the export ban. These include "seeking cooperation with Indonesia" to "better control" cobalt supply and prices in the global market.

Data from professional trading firm Darton Commodities shows that while the DRC remains the world's largest cobalt supplier, Indonesia's market share is growing, accounting for 11% of global cobalt supply last year.

It is worth noting that in Indonesia, cobalt is also mined as a byproduct. Unlike the DRC, Indonesia extracts cobalt alongside nickel. Indonesia is the world's largest nickel producer.

The meeting memo also revealed that the DRC Economic Situation Committee recommended implementing an export quota system to increase domestic processing capacity, though no specific details were provided. In fact, for more than a year, the DRC government has been considering restrictions on cobalt production or exports.