Sun, Mar 01, 2026 page7

• Congo’s cobalt curbs expose China’s critical metals weak spot

  • By Andy Home / Reuters, LONDON
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  China’s dominance of critical mineral supply chains is not as absolute as it might appear.

  Cobalt is a case in point.

  China accounted for 78 percent of global refined output of the battery metal in 2024, according to the International Energy Agency. However, it lacks significant domestic mining capacity, leaving it highly dependent on imports of raw materials.

  That vulnerability has been exposed by the export controls imposed by the Democratic Republic of the Congo, the largest source of cobalt intermediate products for Chinese processors.

  The DR Congo suspended cobalt exports in February last year and introduced a quota system in October.

  Shipments to China then ground to a near standstill during the fourth quarter of last year, with local prices surging amid a scramble for units.

  Competition for Congolese cobalt would only heat up as the US tries to loosen China’s grip on the country’s mineral riches.

  EXPORT CONTROLS

  Kinshasa set export quotas at 18,125 metric tonnes for the fourth quarter of last year and 96,600 tonnes, including a 10 percent strategic allocation, for this year.

  Delays in implementing the new scheme caused export shipments to grind to a complete halt in the final three months of last year.

  The first truck carrying cobalt only left the country in January, according to consulting group Benchmark Mineral Intelligence (BMI), writing for The Cobalt Institute.

  Operators would be allowed to roll their Q4 2025 quotas into this year but with export shipments typically taking three months to make it to China, the country is facing a period of supply tightness.

  PINCH POINT

  The price of refined cobalt traded on the Chicago Mercantile Exchange has surged from US$10/lb (US$4.54/kg) early last year to US$25/lb (US$11.34/kg) thanks to the DR Congo’s export controls.

  That is only part of the story.

  Intermediate products such as Congolese hydroxide are priced on the basis of the cobalt content. This “payable” was trading at about 55 percent of the metal price last month. It is now regularly quoted at an unprecedented 100 percent.

  The squeeze on intermediate products has forced buyers to turn to cobalt metal stocks held by China’s Wuxi Stainless Steel Exchange, the country’s foremost cobalt trading venue.

  More than 3,250 tonnes of cobalt, or 37 percent of exchange stocks, were taken out of Wuxi registered warehouses at the end of January.

  China’s problem is that there are few alternative suppliers to the Congo.

  The main one is Indonesia, where cobalt is mined as a by-product of nickel. Even allowing for increased Indonesian production this year, it would not be enough to fill the gap left by the DR Congo’s restricted export flows, according to BMI.

  COMPETITION

  China has been the dominant operator in the Congo, sourcing copper and cobalt raw materials for its domestic smelters and refineries.

  That is changing.

  Kinshasa’s cobalt export controls are part of a bigger restructuring of its mineral sector as the country seeks to earn more from its natural resources wealth.

  The US has helped mediate a peace deal between Kinshasa and Rwanda to stop the fighting that has engulfed the DR Congo’s eastern regions.

  The deal has opened the country up to US investment. The US International Development Finance Corporation announced in December plans to take a stake in a new joint venture to market the government’s share of copper and cobalt. US buyers would have the right of first refusal.

  Central to US policy in central Africa is the new rail link between the DR Congo and the Angolan port of Lobito, a strategic corridor rivaling the alternative Chinese-backed railway to Dar es Salaam in Tanzania.

  Chinese cobalt buyers are facing not just lower imports from the Congo but increased competition for what is being mined.

  ACHILLES’ HEEL

  Mining is China’s Achilles’ heel when it comes to controlling the global cobalt chain.

  The same is true of many other critical minerals, including even rare earths.

  While China is the world’s largest miner of rare earths it is by no means completely self-sufficient, relying on imports of raw materials from its neighbour Myanmar for heavy rare earths such as dysprosium and terbium.

  As China’s own demand for raw materials grows, it could become even more dependent on third parties to supply the mining inputs.

  That dependence is going to be increasingly problematic as, China’s cobalt buyers are finding out.

  Andy Home is a Reuters columnist. The opinions expressed are his own.
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