Congo Collaborates with Indonesia to Stabilize Cobalt Market

The Democratic Republic of Congo seeks Indonesia’s support to stabilize the cobalt market amidst an oversupply and weakened demand. The DRC proposes measures including export quotas and collaboration with Indonesia, the second-largest cobalt supplier, to enhance the management of their cobalt resources and stabilize prices.

The Democratic Republic of Congo (DRC) is seeking cooperation from Indonesia to stabilize the global cobalt market, which has been impacted by an oversupply and decreasing demand from automakers. The DRC has proposed measures to strengthen its temporary ban on cobalt exports, which began after a significant decline in prices. The aim is to regulate cobalt supply and stabilize market prices in collaboration with Indonesia, recognized as the second-largest supplier of this essential battery metal.

Amid the ongoing situation, the DRC’s Economic Situation Committee, led by Prime Minister Judith Suminwa Tuluka, has suggested additional strategies for managing the export ban effectively. These include potential export quotas and heightened domestic processing requirements, although specific details have yet to be disclosed. Cobalt pricing has improved since the suspension of exports, recovering from recent lows due to the market dynamics of oversupply.

The DRC government halted cobalt shipments in late February, responding to a drastic price drop influenced by global oversupply and diminished demand from the automotive sector. Now, the government is exploring long-term strategic initiatives to optimize the value of its cobalt resources and mitigate the risks of oversupply when the ban is eventually lifted.

Historically, the DRC dominates cobalt production, but Indonesia’s market share has been growing, accounting for 11% of global supply last year, as reported by Darton Commodities. Both countries extract cobalt as a byproduct of other minerals: along with copper in the DRC and nickel in Indonesia. The DRC has been contemplating production and export limitations for over a year, as it aims for increased authority over the cobalt market.

In summary, the Democratic Republic of Congo is intensifying its efforts to stabilize the cobalt market through a proposed partnership with Indonesia. With plans for export quotas and better domestic processing, the DRC is proactive in addressing the oversupply and ensuring the effective management of its cobalt resources. As both countries continue to grow their shares in the cobalt market, this collaboration is critical for future stability and pricing.

Original Source: africa.businessinsider.com