Exclusive: Sources claim that China’s CMOC urges Congo to remove its export prohibition on cobalt

The leading cobalt mining business in the world, China’s CMOC Group (603993.SS), called on the Democratic Republic of the Congo last week to overturn a prohibition on exporting the battery metal, which is now set to expire next month, according to three individuals who spoke to Reuters.

In an effort to reduce surpluses, Congo, the world’s top producer of cobalt, implemented a four-month restriction in February when cobalt prices hit nine-year lows of about $10 per pound, or $22,000 per metric ton.

According to the sources, Congo should remove the export restrictions on the metal, a crucial component of batteries for electric vehicles, after CMOC Vice President Kenny Ives informed participants in a private meeting during an industry gathering in Singapore.

Ives’ comments were heard by sources who say Kizito Pakabomba, Congo’s minister of mines, was present at the meeting.

Congo has left the market wondering what it will do after the ban expires on June 22. In February, sources told Reuters that the government would consider future export curbs in addition to extending the embargo.

According to individuals who wished to remain anonymous because of the delicate nature of the situation, Ives claimed that China’s pipeline stockpile was running short and that Congo needed to permit miners to freely export cobalt.

According to Ives, Congo’s export limitations on cobalt run the risk of hastening the transition of automakers to lithium iron phosphate (LFP) batteries, which do not require cobalt.

LFP batteries, also utilized for utility-scale energy storage projects, have already been included by a few Chinese EV manufacturers, such as BYD.

Congolese officials at the gathering interpreted Ives’ mention of LFPs as a threat, according to two of the individuals. The remarks, according to one source, confirmed the officials’ worries that China is trying to lower cobalt prices in order to accumulate strategic reserves.

Pakabomba and other Congolese officials did not answer phone calls or emails seeking comment.

Speaking to Congo’s stockpiling concerns, CMOC representative Vincent Zhou stated that the business supports a “healthy market environment” but declined to address Ives’ comments or inquiries.

With a 30% interest in the miner, Chinese electric car battery manufacturer CATL (300750.SZ), opens new tab, is one of CMOC’s biggest shareholders, according LSEG statistics.

As it increases up production at its Tenke Fungurume and Kisanfu copper and cobalt mines in Congo, CMOC anticipates producing between 100,000 and 120,000 metric tons of cobalt this year, over double the 56,000 tons produced in 2023 and within range of last year’s 114,000 tons.

GLENCORE SUPPORTS EXPORT PRECISES

During the same session in Singapore, traders from Glencore (GLEN.L), another major cobalt miner, opened a new tab. According to the three sources, the market needed a stable price before the export ban was reversed, and production nations like Indonesia and Congo needed to control overstock.

Glencore would not comment.

According to sources, if the Congolese government decides to impose a quota system, the corporation would accept it, according to the Singaporean Glencore merchants.
Shirley Wang, general manager of Shanghai Metals Market, stated during the Singapore conference that Chinese smelters had accumulated supplies that would last anywhere from two weeks to six months.

According to one of the sources, Congo is presently assessing the effects of the restriction and taking into account suggestions from mining firms and other market participants. The source also mentioned that the government would lose tax income as a result of cancelled exports.

“The most likely scenario appears to be either a direct transition to an export quota starting in late June, or an extension of the ban followed by the introduction of an export quota,” stated Benchmark Mineral Intelligence in a recent release.

“Both scenarios are likely to provide further support to pricing.”