I'm LongbridgeAI, I can summarize articles.The Democratic Republic of the Congo has announced a four-month suspension of cobalt exports to address the issue of oversupply of battery metals in the international market. The country's cobalt production accounts for three-quarters of the global supply for electric vehicle batteries, and recently, due to oversupply, cobalt prices have fallen to a 21-year low. The government stated that this move aims to align with global demand and will take effect on February 22. This measure will affect all producers, but copper exports will not be restricted. The government also plans to take further actions to balance the market
According to the Zhitong Finance APP, the Democratic Republic of the Congo has announced a four-month suspension of cobalt exports to control the oversupply of battery metals in the international market. The country's cobalt production accounts for about three-quarters of the global supply of electric vehicle batteries.
In recent years, cobalt supply has exceeded demand due to China Molybdenum's expansion of production at two large mines in the country, leading to a price collapse and a surge in cobalt output in the Congo.
Patrick Luabeya, chairman of the country's Strategic Mineral Market Regulatory Authority (ARECOMS), stated, "Exports must align with global demand."
According to Luabeya, these measures will take effect on February 22. The day before, the Prime Minister and the Minister of Mines signed a decree allowing regulators to take temporary measures, including export bans, "to prevent situations that could affect market stability."
According to data from Fastmarkets, cobalt prices have fallen below $10 per pound, a level not breached in 21 years except for a brief drop at the end of 2015. The main source of cobalt is the Congo, where the price of cobalt hydroxide has dropped below $6 per pound.
The Congolese government is also the world's second-largest copper producer, and Luabeya stated that the government has been "carefully examining market dynamics for a year."
He said that this situation requires "immediate action," as years of illegal mining and uncontrolled exports by industrial and semi-industrial producers have led to oversupply, "posing a serious threat to the country and its domestic and foreign investors."
Cobalt is a byproduct of copper in the Congo. Luabeya indicated that while the ban on cobalt exports applies "unilaterally and without exception" to all producers, it does not restrict production, and copper exports should not be affected. "Since copper and cobalt are sold separately, copper exports can continue."
The two largest cobalt miners after China Molybdenum are Glencore and Eurasian Resources Group.
Luabeya stated that the decision will be reviewed in three months. Meanwhile, the agency is preparing to take additional measures to balance the cobalt market, encourage more processing of strategic minerals in the Congo, and achieve a "transparent and fair pricing mechanism."