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Alba Otero
Writer“Observe, listen, and reflect” is my journalistic mantra. This philosophy guides me daily and ensures I produce quality journalism. My restlessness has led me explore new areas, such as sustainability and the energy transition, which are crucial to our future. In addition, I’ve also dabbled in street photography, an art that allows me to capture the essence of journalism in action.
Alba Mora
WriterAn established tech journalist, I entered the world of consumer tech by chance in 2018. In my writing and translating career, I've also covered a diverse range of topics, including entertainment, travel, science, and the economy.
The Democratic Republic of Congo recently implemented a new measure that will impact cobalt exports.
No more cobalt? The Authority for the Regulation and Control of Strategic Mineral Substances’ Markets (ARECOMS) announced on Tuesday that exports of cobalt will be suspended for at least four months. According to ARECOMS president Patrick Luabeya, this decision aims to regulate the supply of cobalt in a global market currently facing an oversupply.
The significance of cobalt. Cobalt is a crucial component used in electric vehicles, mobile devices, and several other technologies. In recent years, demand for cobalt has surged. However, cobalt production in the DRC, which accounts for about 70% of the world’s supply, has declined, similar to the trends seen in lithium production. This has allowed other cobalt-producing countries, such as Russia and Australia, to increase their market share.
The cobalt oversupply can be attributed to increased production by Chinese company CMOC, which has doubled its extraction output from two large mines in the DRC. This surge in production has affected the balance of supply and demand, resulting in falling prices. According to Fastmarkets data, cobalt reference prices have dropped below $10 per pound, a level not seen in more than 20 years.
Current impact on the global market. Despite a recent decline, markets are feeling the strain from the DRC’s measure. The suspension of cobalt exports hasn’t yet resulted in immediate price changes. However, market experts believe that in the short term, this action could lead to tighter market conditions. In the end, cobalt stocks will accumulate in the DRC instead of being transferred to Chinese warehouses, as is usually the case.
China. Although the export ban hasn’t currently affected prices, it may ultimately benefit the Asian nation. Chinese companies already control a substantial share of cobalt supply and production, which could mean they’re poised to emerge stronger from this crisis. In fact, China has access to other cobalt sources, including Australia, Russia, and Indonesia. The Southeast Asian country has large cobalt reserves and has seen substantial production growth.
The DRC’s decision has bolstered China’s market dominance. Meanwhile, Western countries face greater challenges in securing essential materials for the technology and energy sectors. As a result, China has solidified its position amid President Donald Trump’s “tariff war.” The U.S. will need many of the materials that China possesses.
The Western technology industry. The DRC’s recent move has directly impacted the tech sector in the U.S. and Europe. These regions depend on cobalt for manufacturing batteries used in electric vehicles and electronic devices. Meanwhile, the African country is working to redefine its role in the global market and has reached out to the U.S. and Europe for support through a new agreement. This approach involves the DRC offering strategic minerals in exchange for assistance in enhancing its stability and development.
This initiative comes in response to the internal tensions currently plaguing the DRC. In particular, Eastern Congo has been the site of armed conflicts, some of which are reportedly connected to Rwanda. They’ve resulted in increased violence in cities such as Goma and Bukavu, which are known for their rich mineral resources.
Through this agreement, the DRC hopes to attract Western investment and reduce its reliance on China in the mining sector. However, it remains uncertain whether the U.S. and Europe will accept this proposal, which could provide them with more stable access to these vital resources.
Copper. Notably, cobalt is primarily mined as a by-product of copper in the DRC. The suspension of cobalt exports won’t impact the production or export of copper, another significant mineral that the country produces in large quantities. As such, while cobalt exports will be restricted, copper exports will proceed as usual without notable changes.
The ban on cobalt exports will continue for an additional three months. DRC authorities will reassess it after that. During this period, it’ll be interesting to see what Western nations do and how China may reshape the global energy landscape.
Images | The International Institute for Environment and Development
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