Congo Pursues Indonesia’s Partnership to Stabilize Cobalt Market

The Democratic Republic of Congo is seeking Indonesia’s support to stabilize cobalt prices amid oversupply and weak demand from automakers. The DRC plans to impose export quotas and enhance domestic processing while cooperating with Indonesia, the second-largest cobalt supplier, to manage global supply effectively. This partnership is seen as essential for regulating the cobalt market and preventing future oversupply issues.

Cobalt prices have started to recover since the DRC’s export suspension, influenced by global oversupply and decreased demand from automakers. The Democratic Republic of Congo (DRC) has proposed new measures to reinforce its temporary ban on cobalt exports. A significant proposal includes securing collaboration with Indonesia, the second-largest supplier of cobalt, to help regulate the global cobalt supply, thereby stabilizing market prices.

Following a four-month export ban instituted in late February, the DRC plans to implement export quotas on cobalt. This decision arises from a dramatic price drop attributed to an oversupply and weakened demand from car manufacturers. DRC’s Prime Minister stated that collaboration with Indonesia is crucial for regulating supply and maintaining price stability in the market.

The Economic Situation Committee of Congo, led by Prime Minister Judith Suminwa Tuluka, is advocating for effective management of the ongoing export suspension. The committee is particularly focused on collaborating with Indonesia to enhance regulatory measures over the cobalt market. Indonesia’s cobalt supply has been increasing and reached 11% of global supply last year, making this partnership significant for both countries.

Cobalt is predominantly extracted as a byproduct in these nations: from copper in Zambia and nickel in Indonesia. The suggestions from Congo’s committee also include implementing export quotas and enhancing domestic processing, although specific details remain undisclosed. Since the ban, cobalt prices have begun to rise from their lows, prompting the DRC government to consider various methods of managing production and exports effectively.

In summary, the Democratic Republic of Congo is taking strategic steps to enhance the management of its cobalt exports, with proposals for cooperation with Indonesia being fundamental. By imposing export quotas and exploring domestic processing options, the DRC aims to stabilize cobalt prices while addressing the global supply challenges. The collaboration with Indonesia as a growing supplier will be crucial in shaping the future of the cobalt market.

Original Source: africa.businessinsider.com