When commodity prices plunge, producers turn off the taps. The Democratic Republic of Congo, home to three-quarters of the world’s cobalt, has done the next best thing by slapping a three-month suspension on exports. This is unlikely to reverse the pounding taken by the blue metal.
Cobalt, named for the evil spirits old-time miners took to be responsible for noxious fumes in their ore, is used in phones, jet engines and electric vehicle batteries. Optimism over electric vehicles pushed the price up to about $40 per pound in 2022, giving a nice ride to miners like London-listed Glencore, which ruled the roost until being elbowed aside by China’s CMOC in 2023.
Naturally, supply boomed. As a byproduct of copper mining, production of cobalt rose alongside growing production of the red metal. CMOC deployed the low cost, high volume China playbook with aplomb, increasing production to the tune of 114,000 tons last year. That left Glencore well behind and vaulted CMOC’s own guidance of 60,000-70,000 tons. This year — pre-export halt — it is guiding for up to 120,000.