The Democratic Republic of the Congo has announced a four-month suspension of cobalt exports, aiming to control the oversupply of cobalt in the international market and stabilize prices. This move triggered a strong rise in the Cobalt Concept sector of the A-share market, while CMOC Group Limited stated that its operations in the Congo were not significantly impacted.

Cobalt is one of the key raw materials for electric vehicle batteries, and the Congo is the core of global cobalt production, accounting for about 75% of the global supply. In recent years, cobalt production in the Congo has significantly increased, leading to an oversupply in the international market. According to Fastmarkets data, cobalt prices have fallen below $10 per pound, the lowest level in 21 years apart from a brief decline at the end of 2015. Patrick Luabeya, chairman of the Congo's Strategic Mineral Market Regulatory Authority, stated that exports must align with global demand, which is why an export ban will be implemented starting February 22, 2025. This measure is based on a decree signed by the Prime Minister and the Minister of Mines the day before, allowing regulators to take temporary measures, including an export ban, in case of market stability concerns.

It is worth noting that the Congo is also the world's second-largest copper producer, but this ban only targets cobalt; copper exports are not affected since copper and cobalt are sold separately. Luabeya emphasized that the ban applies "unilaterally and without exception" to all producers, but does not restrict production, so copper exports will continue.

Market Reaction

On February 25, 2025, the Cobalt Concept sector in the A-share market performed strongly, specifically, Nanjing Hanrui Cobalt and Tengyuan Cobalt both rose by over 8%, while Zhejiang Huayou Cobalt and Tibet Mineral Development also saw significant increases in their stock prices.

From a broader market trend perspective, the cobalt market has faced oversupply pressures in recent years. According to a report by Roots Analysis, the global cobalt market is valued at $16.12 billion in 2024 and is expected to reach $34.73 billion by 2035, with a compound annual growth rate of 7.23%. However, S&P Global analysis indicates that the cobalt market's surplus is expected to ease in 2025 but will still be higher than 2023 levels, and the Congo's export ban may further impact the supply-demand balance.

Responses from major enterprises.

As the world's largest Cobalt Concept producer, CMOC Group Limited has responded to the export ban from the Congo. The company stated that its production Operation activities in the TFM and KFM mining areas in the Congo are proceeding in an orderly manner, and it is expected that this temporary measure will not have a significant impact on its operating performance. CMOC Group Limited has established a special task force to maintain active communication with the Congolese government and industry management agencies, closely monitoring the progress of policy implementation.

The company emphasized that it strictly complies with local laws and regulations, and the MSCI rating remains at AA level, with all Cobalt Concept products being clean, traceable industrial mineral products that conform to the policy direction for the development of the Congolese regulated Cobalt Concept industry.ESGThis response indicates that CMOC Group Limited is actively managing potential impacts and is attempting to reduce uncertainty through cooperation with the government. According to information, CMOC Group Limited holds significant Assets in the Congo, including the Tenke Fungurume Mine and Kisanfu Copper and Cobalt Mine, holding 80% and 95% stakes respectively.

Potential Impacts and Analysis.

Analysts pointed out that the export ban from the Congo is expected to reduce Global Cobalt Concept supply, potentially driving up prices, which would benefit Cobalt Concept producers and related Industry chain companies. However, the ban is only expected to last four months, and its long-term effects remain to be observed. According to the IEA report, despite the current market surplus, Global Cobalt Concept demand is expected to rise from 213,000 tons in 2023 to 344,000 tons by 2030, reaching 454,000 tons by 2040. The ban from the Congo may temporarily relieve the surplus pressure, but in the long run, the growth of alternative sources such as India and Australia may offset some of the impacts.