The Democratic Republic of Congo's decision to impose a four‐month export ban on cobalt in February 2025 has sent shockwaves through global commodity markets. The disruption is a classic example of how Congo cobalt export ban impacts prices, triggering volatility in a market heavily reliant on the DRC for approximately 76% of global cobalt supply. This measure comes as cobalt's critical role in battery production forces manufacturers to re‐examine their supply chains.
London Metal Exchange cobalt prices have surged 56% in just one month, reaching US$33,560 per tonne. Reuters has noted a similar trend in its recent export analysis. Market participants are keeping a close watch on how the Congo cobalt export ban impacts prices further amid growing uncertainty.
Prices for refined products have been even more volatile. Fastmarkets cobalt hydroxide prices—a key precursor for batteries—increased 77% in the first two weeks of March alone. Initially at US$9.50 per pound, the price now stands at US$14.25 per pound. Such steep adjustments underscore the market’s sensitivity to supply shocks and highlight underlying structural issues.
Industry experts argue that no other government policy has ever frozen such a significant portion of a global commodity market. Joel Crane from Cobalt Blue Holdings remarked, “The four‐month export ban has sent shockwaves through the market that will reverberate well beyond its official duration.” His comments emphasise the extraordinary measures taken to mitigate what has become an acute supply crisis.
A closer look reveals that the Congo cobalt export ban impacts prices by disrupting an already fragile balance between supply and demand. This disruption is compounded by the restricted availability of alternative feedstocks. Some alternative sources, however, are emerging, with projects in Australia and Europe attracting investor attention.
The immediate catalyst for the price spike is undoubtedly the DRC’s abrupt policy. Yet, market dynamics fundamentally shaped these events over the past year. Prior to the ban, a significant oversupply—fueled by China Molybdenum’s production expansion—had driven prices down. CMOC nearly doubled production from 55,526 tonnes in 2023 to 114,165 tonnes last year, intensifying the need for corrective measures.
CMOC’s output exceeded its previously publicised 70,000-tonne cap and now aims for 100,000-120,000 tonnes in 2025. An executive from the company stated, “Our expansion at Tenke Fungurume was strategically aimed to meet anticipated battery sector demand growth, but market absorption proved slower than forecast.” This disparity further contributed to a glut in the market.
Inventory management after the pandemic added to the imbalance, as refiners reduced stockpiles to cut costs. One analyst from Fastmarkets noted, “Refiners systematically underestimated post-pandemic EV adoption rates, leading to inventory imbalances throughout the supply chain.” Seasonal demand from consumer electronics further complicated these adjustments.
A pronounced price slump in 2022 paved the way for today’s volatility. When prices fell to about US$25,000 per tonne amid CMOC’s ramp-up, market corrections were delayed. When faced with the withdrawal of 76% of global cobalt supply, Chinese refineries scrambled, leading to acceleration in price increases. This situation further demonstrates how the Congo cobalt export ban impacts prices dramatically.
Cobalt’s dual role in aerospace alloys and battery cathodes makes substitution difficult. As a result, even minor supply disruptions have widespread implications. Manufacturers are now reassessing the risks associated with depending on such a concentrated source for critical materials. The uncertainty has driven refiners to seek alternatives and reassess their risk exposure.
Government decisions, such as the DRC’s ban, are not without precedent. The DRC’s approach echoes lessons from Indonesia’s 2020 nickel export restrictions. Drawing lessons from indonesia’s strategic mining law revision, the DRC policy was designed both to stabilise prices and to finance national infrastructure ambitions. Revenues from cobalt royalties reached approximately US$1.2 billion in 2024, underlining the metal’s fiscal importance.
In addition to stabilising domestic revenue, the DRC hopes to curb aggressive production expansions. China Molybdenum’s output levels, which far exceed previous guidance, prompted fears of a continuing price collapse. This divergence threatened the government’s fiscal revenues precisely when the economy needed boosting.
The DRC government appears to be emulating strategies seen in other resource‐rich nations. Much like africa’s mining boom amid geopolitical challenges, it is considering long-term plans to introduce export quotas. These quotas might require domestic processing investments, aiming for up to 20% local value addition by 2030.
In tandem with export restrictions, China’s cobalt refineries are already feeling the pinch. The disruption has reduced Chinese cobalt sulfate production from roughly 80,000 tonnes per month to 60,000 tonnes. Many refiners had proactively cut their stockpiles during oversupply, leaving them little room to manoeuvre during the ban.
One refinery manager revealed, “We’re securing australian hydroxide to offset DRC shortages, though at significant premiums.” Such statements underline the urgent need for supply diversification, which becomes vitally important when a dominant market player restricts exports.
The cost of cobalt processing adds further pressure. Conversion from hydroxide to sulfate generally costs between US$1,200 and US$1,500 per tonne. However, capacity shortages have driven these premiums higher, exacerbating the financial stress already prevalent in the market.
In a striking move, MMG halted operations at its new Kinsevere processing plant. The US$500 million project was suspended as it struggled with feedstock constraints, a direct consequence of the export ban. This case is a stark reminder of how the Congo cobalt export ban impacts prices and disrupts long-term strategic investments.
Adding to the complexity, an electric vehicle battery materials company is preparing to hold physical stock ahead of its London Stock Exchange listing. This strategic stockpiling further reinforces expectations of sustained high prices. Reports suggest that manufactured premiums for non-DRC cobalt have reached US$2,000 per tonne.
Consumer electronics manufacturers—responsible for about 30% of cobalt usage—are also feeling the pinch. Traditional restocking cycles, which coincide with the Lunar New Year, now result in heightened supply chain pressure. The cyclical demand surge, combined with the constraints imposed by the DRC ban, has left little room for error in supply planning.
Australian cobalt projects are positioned to benefit from these disruptions. Cobalt Blue Holdings is constructing Australia’s first cobalt refinery at Kwinana. This strategic facility is set to process both domestic and imported cobalt concentrates, bolstering the nation’s industrial independence.
The flagship Broken Hill project, one of the largest non-African cobalt resources, contains 82.4 million tonnes of ore at 0.08% cobalt content. Such robust projects become particularly attractive when global supply disruptions persist. This has drawn comparisons with trends noted in us cobalt miner tariffs and strategic growth.
Other international projects are similarly benefiting. Latitude 66’s Kuusamo Schist Belt project in Finland, which contains 5,840 tonnes of cobalt, offers an EU-based alternative to mitigate geopolitical risks. In addition, Antipa Minerals and Golden Mile Resources are contributing valuable resources from Western Australia.
Economic viability has improved markedly due to rising prices. Australian projects now comfortably exceed the approximately US$18,000 per tonne EBITDA breakeven threshold. However, caution remains essential: operational and financing challenges can still lead to significant setbacks, as seen with Jervois Mining, where shareholders lost nearly US$200 million.
Cobalt Blue’s planned Kwinana refinery represents a US$350 million capital investment aimed at producing 16,000 tonnes of cobalt sulfate annually. Such domestic processing capacity is a strategic asset, as manufacturers look to diversify away from dependency on Chinese refineries. It is a move that reinforces how the Congo cobalt export ban impacts prices on both global and local scales.
Long-term forecasts suggest that cobalt prices will remain elevated as long as the export ban is in effect. Analysts estimate that once the ban ends, structural market changes could permanently lift prices. With long-term averages projected at US$27 per pound, there is considerable potential for further appreciation.
A managed export regime, perhaps similar to Indonesia’s policy framework, is under consideration. Government officials have hinted at future export quotas based on investments in domestic refining. These measures could keep prices high even after the four-month ban ends, meaning that the Congo cobalt export ban impacts prices well beyond its immediate timeframe.
Battery manufacturers are reacting quickly to these dynamics. The current price surge, sometimes described as a cobalt price surge, is encouraging a shift towards alternative chemistries. Companies like Tesla have reduced cobalt usage by 60% since 2018, as they work to mitigate supply risks.
Major automakers, such as Volkswagen, are launching initiatives like the “cobalt-free roadmap.” This shift is driven by the dual pressures of high material costs and supply chain vulnerabilities. Waiting too long to adapt could mean enduring even higher input costs across the board.
Investments in related sectors are increasing as well. Rio Tinto’s major expansion in battery metals highlights the competitive drive to secure alternative inputs. This trend reinforces the broader industry transformation towards securing resilient, geographically diverse supply chains.
In summary, the intricate market dynamics remain under close scrutiny. The current environment clearly shows that the Congo cobalt export ban impacts prices sharply and broadly, affecting everything from refining margins to international project economics. Stakeholders now have to balance short-term supply constraints with long-term investment strategies.
• The ban has led to unprecedented price hikes.
• Supply chain vulnerabilities have become apparent.
• Alternative sources from Australia and Europe are gaining momentum.
What are the long-term implications?
Market experts believe that unless a structural change occurs, elevated cobalt prices may persist for years. The export restrictions, combined with evolving battery chemistries and recycling initiatives, are reshaping the entire battery metals market.
How will manufacturers adapt?
Manufacturers are diversifying their supply chains and investing in alternative materials. They are also exploring strategic stockpiling as part of a risk management approach.
The growing uncertainty in the cobalt market reinforces the need for a diversified, resilient strategy. As the industry braces for further volatility, the role of policy decisions will remain decisive in shaping the market landscape. Ultimately, whether through increased recycling or new production investments, stakeholders must adjust swiftly to sustain their competitive edge.
Looking to Capitalize on Mineral Discovery Opportunities?
Discover real-time alerts on significant ASX mineral discoveries with Discovery Alert's proprietary Discovery IQ model, turning complex data into actionable investment insights before the market moves. Explore how major mineral discoveries can lead to significant returns by visiting the Discovery Alert discoveries page and position yourself ahead of the market with a 30-day free trial.
