DRC outlines timeline for new cobalt export decision
The Democratic Republic of Congo (DRC) plans to announce a decision on the next steps of the cobalt export ban on June 22. This is when the measure currently in force will expire. The country’s representatives told delegates attending the Cobalt Congress in Singapore on Wednesday May 14.
Export ban review postponed with calls for economic recovery and market balance
“To preserve the future of our cobalt, on June 22 a new decision will be made to extend, modify or terminate the ban,” said Patrick Luabeya. He is the chairman of the DRC’s Authority for the Regulation and Control of Strategic Mineral Substances’ Markets (ARECOMS), which is responsible for regulating strategic minerals, including cobalt.
A review of the export ban was initially planned to take place by May 22, three months after the measure took effect on February 22. Market participants expected a follow-up announcement to be made at the conference. However, the DRC authorities said the country will not make a decision until next month.
Market reactions and economic impact of the DRC cobalt export ban
“Regarding the [export] measures, our main goal is to rebalance the market and bring it back to a healthy and sustainable level to create local value. We need to take measures to transform the current challenges to become opportunities for the entire country,” he said.
“The next decision will innovatively solve the issues facing the DRC. It will continue until the market balance is reached for the supply and demand of cobalt,” he added.
Cobalt price trends and economic implications in the DRC
“The fall in cobalt prices affected the local economy and did not benefit the country. This needs to change,” said Jimmy Munguriek, DRC country director of Resource Matters.
Fastmarkets’ daily cobalt standard grade, in-whs Rotterdam price reached its lowest point earlier this year at $9.50-10.40 per lb on February 19. It was assessed at $15.25-16.50 per lb on Wednesday May 14.
Market awaits clarity on DRC cobalt export ban and local beneficiation plans
Conference delegates had been seeking clarity on what the next steps would be at a closed-door roundtable earlier on Wednesday. An extension of the ban or the adoption of a quota system was considered as possibilities.
“[DRC representatives] said there was no decision yet and they would collect information to review the situation. One or two producers voiced their concerns to the [DRC] minister about the longer term picture of the ban. However, no decision was hinted,” said a trader speaking on the sidelines of the conference.
Local refining and beneficiation plans tied to the DRC cobalt export ban
Representatives from the DRC said during a panel that they believed local communities had not benefitted from the historic cobalt mining operations in the country.
“In the past, there has been no transformation at a local level. If export licenses are to be granted, then you must transform locally or you won’t be allowed to export,” said Munguriek.
The lack of clarity has been damaging the long-term outlook for cobalt, market participants told Fastmarkets after the DRC announced the postponement of any decision until June.
“It’s bad for the market. No further clarity creates instability, and the market will move away from cobalt. It’s ridiculous. The situation would be much better if the DRC were cooperative on this matter,” said one trader upon hearing the news.
Representatives for the DRC also expressed a desire to integrate the country’s supply chain and step up domestic refining capacity. Some market participants said this was an effort to replicate Indonesia’s policy for cobalt and nickel production. This policy led to an increase of downstream capacity in the Asian country.
“We don’t want to just be a supplier of raw cobalt. We want to be a full participant of the value chain within the country,” said Kizito Pakabomba Kapinga Mulume, the DRC’s Minister of Mines.
The Indonesian Deputy of Investment and Mining Coordination to the Coordinating Minister for Maritime Affairs said at the conference that the DRC’s intentions could impact the cobalt long-term downstream market outlook.
“It’s dangerous to set the cobalt price too high. The downstream market will find an alternative, like what’s happened with nickel battery chemistries,” said Septian Hario Seto.
“If the battery cost is too high, cobalt will be reduced in the chemistry, like what happened before” he added.
Indonesia expects domestic production capacity will not increase beyond a ramp-up to 114,000 tonnes per year of cobalt, according to Seto.
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