The Democratic Republic of Congo (DRC), the world’s largest cobalt producer, has extended its export ban on cobalt by another three months. The decision, aimed at strengthening the country’s influence over cobalt pricing, reflects ongoing efforts by the Congolese government to convert its dominant position in the global supply chain into greater economic leverage. However, the move has not had the market impact officials may have intended.

Announced earlier this week, the extension comes after the initial export ban, implemented in February 2025, caused a brief spike in cobalt prices. This time, however, the price response has been minimal, reflecting a broader expectation among market participants that an extension was likely, and underscoring persistent challenges with oversupply and shifting demand dynamics.

Supply Chain Realities Blunt Impact

Despite the DRC’s central role in global cobalt production, the country’s influence over prices remains limited by structural factors. One of the most significant is cobalt’s status as a by-product of copper mining. Copper is a far larger revenue generator for Congo, and any attempt to curb cobalt production risks disrupting copper output, which is in high demand globally.

This dynamic makes it difficult for Congo to directly control cobalt supply in the same way that Indonesia, for example, has begun to manage nickel production using mine quotas. Whereas Indonesia can limit direct nickel extraction, Congo would have to restrict copper mining to cut cobalt output — a move that would carry considerable economic costs.

Congo’s copper industry is currently benefiting from high global prices, with the London Metal Exchange reporting copper trading near $9,900 per ton. Companies operating in Congo, such as China’s CMOC Group and Swiss-based Glencore, have strong financial incentives to maintain or increase copper production. Since cobalt is typically recovered alongside copper, production of cobalt continues, regardless of export restrictions.

Delayed Market Effects and Inventory Buffer

Another factor dulling the impact of the export ban is the existing stockpile of cobalt in the global supply chain. It typically takes about 90 days for Congo’s intermediate cobalt product — primarily cobalt hydroxide — to reach refining facilities in China. As a result, the full impact of the initial February ban has yet to be felt in the physical supply chain.

China’s imports of Congolese cobalt remained high in the months immediately following the announcement of the ban, with over 50,000 metric tons recorded in both March and April. This sustained import volume, along with years of cobalt oversupply, has left the Chinese supply chain bloated.

Benchmark Mineral Intelligence (BMI), a market consultancy, estimates that cobalt stocks held outside Congo now amount to 8 to 10 months’ worth of global consumption as of the second quarter of 2025. This inventory cushion means that even extended export restrictions from Congo may not cause significant shortages or price increases in the near term. BMI predicts that China’s cobalt hydroxide stocks are unlikely to run low until late 2026, assuming no major changes in consumption trends or supply disruptions.

Slowing Demand from Battery Sector

Compounding the challenge for Congo is a gradual decline in demand for cobalt in the battery industry. In recent years, Chinese electric vehicle (EV) manufacturers have increasingly shifted away from cobalt-heavy battery chemistries toward alternatives like lithium iron phosphate (LFP), which do not rely on cobalt.

According to data compiled by Shanghai Metal Market for the Cobalt Institute, cobalt sulphate consumption by China’s battery cathode sector declined in 2024. As the world’s largest market for EV batteries, reduced cobalt demand in China has a substantial impact on global pricing and long-term demand expectations.

Export Quotas Under Consideration

Faced with limited effectiveness of the blanket export ban, the Congolese government is reportedly exploring an export quota system as a potential alternative. Such a system would allow for limited, controlled cobalt exports rather than a full ban.

However, implementing and enforcing export quotas presents logistical and regulatory challenges. Moreover, quotas would not directly address the continued accumulation of cobalt inventory within the country, nor would they guarantee a meaningful price response in a saturated global market.

The government has not indicated what price level it considers acceptable or desirable for cobalt. Without a clear price target or enforcement mechanism, the effectiveness of any future quota-based system remains uncertain.

Industry analysts have pointed to Indonesia’s approach to mineral policy as a potential model for Congo. In recent years, Indonesia has tied mineral export permissions to commitments for domestic processing investment. This strategy has led to the construction of new smelters in the nickel and copper sectors, effectively encouraging value addition within the country.

Congo could potentially pursue a similar path by linking cobalt export access to requirements for local refining or downstream processing. While such a strategy would not solve the issue of cobalt overproduction — given its by-product status — it could help the country capture a greater share of value from its natural resources.

Despite its dominance in production, the country has limited tools to influence pricing without broader structural reforms or market cooperation. The extended export ban is likely to keep pressure on supply logistics and may affect global stock levels over time. However, unless accompanied by changes in production, demand recovery, or coordinated market action, its impact on prices may remain marginal.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.