Congo is thinking about extending the ban on exporting cobalt while it looks at caps, sources say

The Democratic Republic of Congo is contemplating an extension of its ban on cobalt exports while examining the implementation of quotas for shipments of this essential electric vehicle battery material, according to four sources familiar with the discussions, as reported by Reuters.

The Congo government is expected to maintain the ban as it seeks additional time to determine the distribution of export quotas among mining companies involved in the production of the battery vehicle metal, according to sources who wish to remain anonymous due to the confidential nature of the discussions.

In February, the leading cobalt supplier implemented a four-month ban on cobalt exports, set to expire on Sunday. This measure aimed to address oversupply and revitalize prices for the metal, which had reached a nine-year low.

A proposal to implement quotas has support from producers such as Glencore (GLEN.L), the world’s second-largest cobalt-producing company. In contrast, Glencore’s stance is not aligned with that of CMOC Group (603993.SS), which has actively advocated for the lifting of the ban.

Eurasian Resources Group, a significant producer in Congo, is also advocating for the ban to be lifted and is keen to receive further information from the government regarding the implementation of quotas on cobalt exports, according to a separate source who spoke to Reuters.

Zack Hartwanger, head of commercial for Africa at Swiss-based commodity trader Open Mineral, indicates that the government is not entirely united on the decision to extend the ban.

“Certain individuals in government expressed worries regarding revenues, employment, and informal supply chains,” Hartwanger stated.

“A conflict exists between the objectives of industrial policy and the actual economic conditions.”

CMOC, the leading cobalt-producing company globally, along with Congo’s Ministry of Mines, did not reply to emailed inquiries from Reuters.

The Authority for the Regulation and Control of Strategic Mineral Substances’ Markets, known as ARECOMS, which oversees the enforcement of cobalt export restrictions, did not reply to emailed inquiries.

CMOC is increasing cobalt production at its two mines in Congo, where the battery material is generated as a byproduct of copper, despite a decline in demand from electric vehicle manufacturers as the sector experiences slower growth.

In February, the market surplus caused prices to fall to as low as $10 per pound or $22,000 per ton.