The Democratic Republic of Congo (DRC), the world’s leading cobalt producer, has temporarily suspended cobalt exports for at least four months in response to an oversupply in the market, reported Bloomberg.
The decision follows a drop in cobalt prices, attributed to a surge in supply and a slowdown in demand.
The ban is effective from 22 February, according to the Authority for the Regulation and Control of Strategic Mineral Substances’ Markets (ARECOMS).
ARECOMS, established in 2019, is tasked with regulating strategic minerals and aims to stabilise markets and formalise the artisanal mining sector.
ARECOMS president Patrick Luabeya said: “This measure is intended to regulate supply on the international market, which is faced with a production glut.”
The DRC is the world’s largest producer of cobalt, which is crucial for the production of rechargeable batteries in various electronic devices. The Katanga region is a hub for both industrial and artisanal cobalt mining.
The suspension encompasses all mining operations, from industrial to small-scale production. After three months, an assessment will be conducted to decide on the future of the ban.
The regulator announced stricter regulations for the domestic cobalt industry, banning the mixing of artisanal and industrially mined cobalt.
“The situation required immediate action as years of illegal mining and uncontrolled exports from both industrial and semi-industrial producers led to excessive supply, posing a serious threat to the country and its domestic and international investors,” Luabeya added.
ARECOMS has issued a decree, co-signed by Mines Minister Kizito Pakabomba, to ensure compliance with the new regulation, reported Reuters.
The price of cobalt futures on China’s Wuxi Stainless Steel Exchange saw a notable increase following the announcement.
Chinese-listed CMOC Group and London-listed Glencore are the biggest cobalt producers in the DRC.
CMOC had previously doubled its cobalt output to approximately 114,000 tonnes (t) from about 56,000t, as it increased copper production at its two mines in the country.
GlobalData forecasts that the DRC’s cobalt production will reach 244,000t in 2024.
