MMG suspended operations at its newly opened cobalt plant in the DRC due to a price decline and an export ban. This facility was placed on maintenance shortly after its launch. The DRC’s oversupply has affected cobalt prices, prompting MMG to adopt a flexible production plan while boosting copper output by 40% this year.
MMG, a state-controlled mining enterprise in China, announced the suspension of operations at its cobalt processing facility in the Democratic Republic of Congo (DRC) shortly after launching in September 2023. This decision, effective December 2024, resulted from a prolonged slump in cobalt prices and a recent export ban imposed by the Congolese Government. Cobalt is essential for electric vehicle batteries, and its declining market conditions have prompted the company’s action.
MMG had invested approximately $600 million into the Kinsevere project to enhance copper output and establish cobalt production. Despite this substantial investment, market conditions led the facility to be placed on care and maintenance shortly after its commissioning. The DRC, a leading cobalt producer, has witnessed a significant increase in cobalt production, especially from CMOC Group, resulting in an oversupply that adversely affected prices.
A recent four-month export ban by the Congolese Government aims to mitigate the oversupply in the cobalt market and increase state control over pricing. In light of the current situation, an MMG spokesperson indicated that the company has employed a “flexible production strategy” and will consider resuming cobalt operations dependent on market evaluations. Furthermore, MMG plans to boost copper production by at least 40% during the year.
In the previous year, MMG produced 1,600 tonnes of cobalt from Kinsevere and 380,000 tonnes of copper across its global operations. The company’s most significant asset remains the Las Bambas mine located in Peru. Additionally, the DRC established a state monopoly to regulate the production and export of artisanal cobalt. This new framework assigns exclusive export rights of hand-dug cobalt to the state-owned Entreprise Generale du Cobalt.
In summary, MMG has suspended cobalt processing at its Kinsevere facility due to unfavorable market conditions and a government-imposed export ban. The company’s strategic response includes a focus on increasing copper production while remaining flexible regarding future cobalt operations, reflecting the challenges posed by recent market dynamics and state regulations in the Democratic Republic of Congo.
Original Source: www.mining-technology.com
