What's next for DRC's cobalt export ban?

DRC's 4-month cobalt export ban expires next week. Has it been successful? Should it be extended in some form? What does history tell us about similar efforts?

In February 2025, the Democratic Republic of Congo (DRC) imposed a temporary four-month ban on all cobalt exports from the country in an attempt to constrain supply and bolster low global cobalt prices. In this post, we cover the motivations behind the export ban, the possible impacts of the ban, and what longer-term policy options exist.

What prompted the export ban?

The DRC government’s motivation was to address oversupply in the global market, which had caused cobalt prices to decline to an almost ten-year low in February 2025 (see Figure 1 below).

Figure 1: Cobalt prices 2021-2025 (USD/metric ton)

Demand for cobalt has grown notably in recent years, driven primarily by increased demand for battery applications, such as electric vehicle batteries which use cobalt in their cathodes. According to the Cobalt Institute, EV batteries accounted for 43% of cobalt demand in 2024. Despite strong demand growth, cobalt supply expanded even more, prompting oversupply and a persistent decline in global prices.

DRC is the world’s largest producer of cobalt, accounting for 76% of global mined cobalt in 2024. Cobalt from DRC surged in 2024 as China’s CMOC Group more than doubled its combined output from the Kisanfu and Tenke-Fungurume mines. CMOC indicated that it intends to maintain this high level of production. At the same time, Indonesia, the second largest cobalt producer globally, significantly expanded its nickel production. With cobalt being produced as a by-product of nickel in Indonesia, this further raised global cobalt supply.

Too much cobalt was being produced and prices were set to decline even more. DRC’s mining sector had been projected to contribute around 30% of government revenues in 2025, but low cobalt prices were eroding DRC’s revenues from the sector. The DRC government decided to intervene to fortify global prices: it couldn’t fix prices, but it could attempt to constrain supply.

What impacts could the ban have?

Immediately after the ban was announced, global cobalt prices strengthened and stabilised around 52% higher, although at a level still significantly below 2022 prices (see Figure 2 below).

Figure 2: Cobalt prices Jan-June 2025 (USD/metric ton)

Although this appears promising in the short run, broader dynamics mean it may have limited benefits for DRC in the long run. Understanding these dynamics is useful to inform thinking about longer-term policy options.

First, an export ban is only a temporary patch. It cannot be maintained for more than a few months before mining companies begin to re-think their operations in that country. If mining companies cannot sell their mineral products, they will leave. The DRC government also cannot forego revenues from cobalt mining for much longer - no earnings from the sector is already negatively impacting public spending.

Second, cobalt stockpiles have built up in DRC as production continued during the ban period. Sooner or later, this stockpiled cobalt will need to enter the global market - and it has the potential to flood the market and sink prices when it does if release is not carefully controlled.

Third, the higher cobalt prices that DRC has achieved could motivate producers elsewhere to expand production capacity by increasing production at existing mines or developing new mines. This could lead to even higher levels of supply in the future, potentially creating a worse oversupply problem than today. The expansion of production capacity elsewhere could also permanently lower DRC’s share of global cobalt production in the long run. DRC has attempted to mitigate these risks by exploring cooperation with Indonesia on constraining cobalt supply - essentially a proposal to create a government-led cartel. However, there’s no indication that Indonesia has agreed to cooperate - and it’s difficult to see why they would: since Indonesia produces cobalt as a byproduct of nickel, limiting their cobalt output would require them to limit their nickel output too. This is likely a bridge too far for Indonesia, who is set on expanding its nickel sector to become a leading EV battery producer. There seems to be insufficient cohesion between DRC and Indonesian objectives to establish or sustain a government-led cartel. History shows us that such cartels tend to be short lived in any event, as illustrated by the story of CIPEC below.

Fourth, in the event that DRC somehow secures Indonesia’s cooperation on limiting cobalt output, creating cobalt shortages or significantly driving up cobalt prices would encourage downstream manufacturers to simply innovate away from cobalt, either reducing cobalt content in their products or substituting with other materials to develop cobalt-free products. Since developing new innovations and technology can take considerable time and money, their uptake is generally permanent - i.e., lower cobalt prices and greater availability of cobalt in the future wouldn’t reverse track back to reliance on cobalt.

CIPEC: An example of a government-led mineral cartel

In 1967, the Intergovernmental Council of Copper Exporting Countries (or French Conseil Intergouvernemental des Pays Exportateurs de Cuivre (CIPEC)) was formed - its founding members were Chile, Peru, Zambia, and DRC, while Australia, Indonesia, Papua New Guinea and Yugoslavia joined later. By the early 1980s, the group accounted for 70-80% of global copper exports and possessed more than 50% of proven copper reserves. CIPEC's chief aim was to stabilise copper prices by coordinating members' production levels.

Reality proved challenging, however. Although CIPEC members accounted for a significant share of copper produciton, they didn't possess market power (being both the ability and the incentive to control the market). Within CIPEC, there was insufficient internal cohesion in members' interests and no mechanism to discipline cheating members who exceeded agreed production limits. As a result, CIPEC failed to effectively coordinate production limits across members and didn't succeed in raising copper prices in the long run. CIPEC was disbanded in 1988.

What longer-term policy options exist

DRC has shown that it’s willing to take tough decisions to protect its interests and ensure it receives due benefit from its cobalt resources. But an export ban is unsustainable and is unlikely to benefit DRC in the long run. With the ban’s expiration date approaching, DRC policymakers face the choice to either (i) leave the market to function in an unrestricted manner and hope that cobalt prices recover in the future or (ii) continue intervening in the market in some form.

Leaving the market alone

DRC policymakers could choose to allow unrestricted cobalt production and exports. Oversupply will persist for some time and prices will continue to drop until they reach a level where some producers can no longer cover their production costs, leading some mines to cease operations and cobalt supply to contract. Those who produce cobalt as a byproduct of another mineral, such as Indonesia, complicate this picture somewhat as their supply of cobalt is only partly determined by cobalt prices - they will continue to produce cobalt as long as their joint nickel-cobalt operations are viable. Nevetheless, in theory, demand will exceed supply at some point and cobalt prices will start climbing again. When this is likely to happen is unclear - DRC could face an extended period of low prices in the meantime.

Continued intervention in some form

The DRC government could choose to extend the export ban for a further period. However, there seems to be broad recognition that this could only ever be a temporary option. As such, there’s much speculation that DRC will replace the export ban with an export quota system, which is seen as a potentially more sustainable solution to constrain supply.

There’s mixed sentiment around the export quota idea. Fédération des Entreprises du Congo (FEC) has vocally opposed this idea, claiming that it’s a violation of the Congolese Mining Code, which allows mining companies to sell their products freely. Reports suggest that DRC’s biggest mining companies, CMOC and Glencore, are divided on the issue of export restrictions. CMOC has called for the export ban to be lifted, warning that DRC’s actions are merely accelerating the shift toward cobalt-free batteries, while Glencore appears to support the idea of retaining limitations on exports (and therefore production). Given that the cobalt supply glut has been driven primarily by Chinese mining companies - and CMOC in particular - this divergence in views is not surprising.

An export quota - that would indirectly also limit production - could keep prices up in the short run, providing a more sustainable mechanism to stemming oversupply than an export ban. However, other producing countries, including Indonesia, could free-ride off the DRC’s efforts, benefitting from higher prices without restricting their own output. In time, they could come to oversupply the market, driving prices down again, and growing production elsewhere will erode DRC’s position as the lead global cobalt producer.

DRC’s options are not great. Doing nothing would mean significant revenue losses in the short run, and potentially for many years before prices recover. But the advantage of an export quota system is uncertain, especially if DRC doesn’t have the cooperation of other producing countries - there may be short run gains for DRC but others are likely to benefit more than DRC in the longer run. In deciding which route to take, DRC policymakers will need to weigh up short run gains/losses vs. long run gains/losses of each option. Rigorous economic analysis, rather than sentiments of resource nationalism, should shape this policy decision if DRC is to achieve the best of the possible outcomes available.

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