THE Democratic Republic of Congo will suspend cobalt exports for four months to rein in oversupply of the battery metal on the international market, said Bloomberg News.
Congo produces about three-quarters of the world supply of cobalt which has soared in recent years. China’s CMOC Group ramped up output at two large mines in the country causing supply to outpace demand and prices to tumble, said the newswire.
“Exports must be aligned with world demand,” Patrick Luabeya, president of the Authority for the Regulation and Control of Strategic Mineral Substances’ Markets, known as ARECOMS, told Bloomberg.
The measures came into force on February 22, according Luabeya. A day earlier, the prime minister and mines minister signed a decree allowing the regulator to take temporary action, including barring exports “in case of circumstances affecting the stability of the market”, said Bloomberg.
Benchmark metal prices have dropped below $10 a pound, a level not breached for 21 years apart from a brief dip in late 2015, according to Fastmarkets data. Cobalt hydroxide, the main form of the metal produced in Congo, has slid below $6 a pound.
Cobalt is used in the manufacture of electric vehicle batteries. However demand for cobalt has also been under pressure due to a slowdown in the electric vehicle market and sluggish sales of consumer electronics.
It was reported earlier this month that Glencore had cut its production target for cobalt this year in response to weak market conditions. The company will produce between 35,000 to 40,000 tons of the battery metal this year, down as much as 42% from a production target set in December 2022, it said.