The Democratic Republic of Congo aims to stabilize the cobalt market by collaborating with Indonesia, implementing export quotas, and exploring domestic processing requirements to manage oversupply and weak demand from automakers.
The Democratic Republic of Congo is seeking collaboration with Indonesia, the world’s second-largest cobalt supplier, to regulate global cobalt supply and stabilize falling prices. This request follows the DRC’s decision to implement export quotas after a four-month suspension of cobalt exports, which began amid a significant price drop attributed to oversupply and reduced demand from the automotive industry.
Cobalt prices have notably rebounded since the suspension of exports, which was initiated to counteract the decline in value caused by a global oversupply. The Congolese government is exploring long-term strategies to maximize the value of its cobalt resources, ensuring that sales do not lead to oversupply once the ban is lifted.
The Economic Situation Committee of Congo, presided over by Prime Minister Judith Suminwa Tuluka, has proposed several actions to manage the export situation efficiently. These include additional cooperation with Indonesia and introducing export quotas, as well as increasing domestic processing, though specific details were not disclosed.
Congo retains a significant position in the cobalt market, contributing substantially to global supply. However, Indonesia’s cobalt share has continuously increased, reaching an estimated 11% last year according to Darton Commodities. Both countries are unique in their cobalt extraction processes, with cobalt being a byproduct of copper in Congo and nickel in Indonesia.
In conclusion, the Democratic Republic of Congo is pursuing strategic measures to stabilize the cobalt market amid challenges resulting from oversupply and diminished demand. Collaborating with Indonesia and implementing export quotas are pivotal steps in adjusting to current market dynamics, with an aim toward efficient resource management and future stability in cobalt pricing.
Original Source: africa.businessinsider.com
