What's Happening?
The Democratic Republic of Congo (DRC), a major global supplier of cobalt, has implemented a new export quota regime following a months-long ban. This regime, effective since October 16, allocates 18,125 metric tons for the fourth quarter and caps annual
exports at 96,600 tons starting in 2026. Major cobalt producers, including China's CMOC and Glencore, have received the largest shares, while the regulator ARECOMS retains a 10% strategic reserve. However, the new rules have led to confusion among exporters due to unclear procedures and payment requirements, resulting in stalled shipments. The DRC government has imposed conditions such as a 10% royalty prepayment and the need for a compliance certificate before shipments can proceed. The mining lobby in Congo has requested urgent discussions with the government to address these issues, as the delays threaten to disrupt global battery supply chains, particularly affecting Chinese refiners and electric vehicle manufacturers.
Why It's Important?
The situation in the DRC is critical as it supplies over 70% of the world's cobalt, a key component in electric vehicle batteries. The export delays could significantly impact global supply chains, particularly in China, which controls a substantial portion of global cobalt refining capacity. Major companies like Tesla, BYD, and CATL rely on this supply for their operations. The new export rules, aimed at stabilizing cobalt prices, have already led to an 80% increase in cobalt hydroxide prices since February. Any prolonged disruption could lead to further price hikes and supply shortages, affecting the electric vehicle industry and potentially slowing down the transition to renewable energy technologies.
What's Next?
The DRC's mining lobby is pushing for high-level meetings with the government and ARECOMS to resolve the legal ambiguities and compliance hurdles. The outcome of these discussions will be crucial in determining the future of cobalt exports from the DRC. If the issues are not resolved promptly, the delays could extend into April, exacerbating supply chain disruptions. The international community, particularly stakeholders in the electric vehicle and battery manufacturing sectors, will be closely monitoring the situation. The DRC's ability to maintain its credibility and attractiveness as a mining destination is also at stake, as any perceived deviation from the mining code could undermine operator confidence.
