DRC’s Export Shock Triggers Cobalt Price Surge, and Supply Worries

The Democratic Republic of Congo (DRC) has jolted the global battery metals market with its latest policy shift, introducing a cobalt export quota system that has already sent prices soaring to their highest levels in three years. Following an export ban imposed in February 2025, the DRC, responsible for roughly 70% of the world’s cobalt supply, plans to replace the blanket restriction with a quota regime starting this October. The move, designed to tighten control over outbound shipments and extract greater value from domestic production, has triggered a more than 20% surge in cobalt and cobalt hydroxide prices as traders and refiners scramble to secure supply.

Under the new framework, export quotas will be allocated based on historical performance, specifically referencing production and export data from 2022 to 2024. This formula significantly constrains major producers, including China Molybdenum Company (CMOC), which has been assigned a quota of around 31,200 tonnes for 2026, roughly 27% of its previous output. As a result, supply availability for downstream users has sharply tightened, particularly in China, the world’s largest cobalt refiner and consumer. In August, Chinese imports of cobalt intermediates reportedly collapsed by more than 90% year-on-year, reflecting the combined effects of Congolese restrictions and logistical congestion at African export hubs.

To mitigate the shortfall, some Chinese refiners have resorted to unconventional measures, purchasing refined cobalt metal instead of hydroxide and dissolving it directly into battery-grade cobalt sulfate, a key precursor for lithium-ion battery cathodes. While such workarounds help sustain short-term production, they are costlier and less efficient, reinforcing concerns about structural vulnerabilities in the global supply chain for critical battery minerals.

Analysts warn that strict enforcement of the DRC’s quota system could push the cobalt market into deficit by mid-2026, potentially unleashing another wave of price escalation reminiscent of the 2018 supercycle. The DRC government, however, views its intervention as a strategic tool to stabilize prices, raise state revenues, and encourage local beneficiation, particularly the development of domestic refining and precursor industries. The success of this policy will hinge on effective quota management, transparent allocation processes, and the prevention of illicit export “leakage,” a recurring challenge in the country’s resource governance.

The implications extend far beyond Kinshasa. A prolonged cobalt squeeze could reverberate across the global battery supply chain, affecting electric vehicle (EV) manufacturers and renewable energy storage developers who rely on consistent cobalt supply for advanced cathode chemistries. For Africa, the episode highlights the growing geopolitical leverage of mineral-rich nations in the energy transition era, and the delicate balance between national sovereignty and market stability. If the DRC manages to channel its cobalt policy into structured industrial growth rather than supply disruption, it could redefine Africa’s role in the world’s clean-tech economy.

Mini-Glossary

• Cobalt Hydroxide: A semi-processed cobalt product used as feedstock for refining into cobalt sulfate or metal.
• Quota System: A regulatory framework that limits the quantity of a commodity that can be exported or produced, often to manage market supply.
• Battery-Grade Cobalt Sulfate: A refined chemical compound used in manufacturing lithium-ion battery cathodes.
• Beneficiation: The process of adding value to raw minerals by refining or processing them locally before export.
• Supply Deficit: A market condition where demand exceeds available supply, typically leading to higher prices.
• Cobalt Supercycle (2018): A period of sharp price increases driven by surging demand for electric vehicle batteries.
• Leakage: The illegal or unreported movement of commodities outside official export channels.