The Democratic Republic of Congo’s export suspension for cobalt is likely to fail due to enforcement difficulty amid border issues and competition from countries like Canada and Indonesia. Technological advancements are moving away from cobalt use in batteries, further threatening demand. The government is considering export quotas, but no final decision has been made yet.
The Democratic Republic of Congo’s (DR Congo) recent decision to suspend cobalt exports for three months is projected to be ineffective, according to a report by the Financial Times. Enforcement of this suspension will be challenging due to the country’s porous borders, particularly in light of ongoing tensions with Rwanda. Additionally, the increasing production of cobalt as a by-product from countries like Canada and Indonesia adds to the competitive landscape.
On the demand side, shifts in technology also threaten the viability of cobalt in the market. “Car manufacturers are starting to switch from nickel manganese cobalt batteries to cobalt-free lithium-iron-phosphate (LFP) batteries, which have longer life cycles and fewer environmental issues,” the Financial Times reported. While LFP batteries currently face lower adoption rates, improving technologies may further diminish the relevance of cobalt in the long term.
DR Congo, which accounts for approximately 75% of global cobalt supply, has experienced a surge in production recently, attracting new players such as China’s CMOC Group, which has significantly increased output from its mines. This surge has contributed to a supply glut, leading to falling prices. In response to this, the Congolese government has hinted at possible export quotas to stabilize the market, although no definitive measures have been implemented as of yet.
In summary, the Democratic Republic of Congo’s suspension of cobalt exports may not succeed due to enforcement challenges and increasing global competition. Additionally, the shift toward cobalt-free batteries by automotive manufacturers could further reduce cobalt’s market demand. As the situation evolves, the Congolese government is exploring export quotas as a potential solution to address oversupply and improve pricing.
Original Source: www.miningmx.com
