The Democratic Republic of Congo has extended by three months a ban on exports of cobalt in a bid to curb oversupply of the electric vehicle battery material, the country's regulatory agency has said.
DR Congo, the world's top cobalt supplier, imposed a four-month suspension on exports in February after prices had hit a nine-year low at just $10 a pound. The ban was due to expire on Sunday.
"The decision has been taken to extend the temporary suspension due to the continued high level of stock on the market," the Authority for the Regulation and Control of Strategic Mineral Substances' Markets (ARECOMS) said in a statement Saturday.
ARECOMS said it expected to announce a subsequent decision to either modify, extend or terminate the suspension before the new three-month window closes in September.
The Democratic Republic of Congo produces over 70 percent of the global supply of cobalt. The metal is a critical component of batteries and seen as key to the renewable energy transition.
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The price of cobalt has dropped due to a big rise in production and a drop in demand for cobalt in electric vehicle batteries.
Congolese authorities had been considering extending the ban as they explore how to distribute quotas for shipments of cobalt among mining companies.
A proposal to implement quotas has backing from miners including Glencore, the world's second-largest cobalt-producing company. But Glencore's position differs from that of the number one producer, China's CMOC Group, which has lobbied for the ban to be lifted.
Eurasian Resources Group, another key producer in Congo, also wants the ban lifted.
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The government is not fully united on extending the ban, according to Zack Hartwanger at Swiss-based commodity trader Open Mineral.
"Some [in government] raised concerns about revenues, employment, and informal supply chains," Hartwanger said. "There’s tension between industrial policy goals and economic realities."
(with Reuters)
