Eurasian Resources Group (ERG) has declared force majeure on cobalt deliveries from its Metalkol operation in the Democratic Republic of Congo due to the country’s temporary export ban.
The ban, imposed by Congo to address oversupply and plummeting prices, has forced ERG, a major cobalt producer, to halt shipments as it lacks stockpiles outside the country.
Congo, the world’s leading cobalt producer, suspended exports for four months, aiming to stabilize prices that had reached nine-year lows.
The government is also considering implementing export quotas.
ERG’s Metalkol operation, which processes tailings, accounted for approximately 9% of Congo’s total cobalt production last year, representing 7% of global output.
The export ban has triggered concerns about supply shortages, leading to a significant surge in cobalt prices in China, a major consumer.
Prices assessed by Shanghai Metals Markets have risen by over 20% since the ban was announced.
Congo’s Authority for the Regulation and Control of Strategic Mineral Substances’ Markets (ARECOMS) will review the ban in three months, with potential modifications or termination.
The government intends to negotiate export quotas during the suspension period.
The ban has impacted ERG more acutely than other major producers like CMOC Group and Glencore, who maintain cobalt stocks outside Congo.
The situation underscores the DRC’s significant influence on the global cobalt market and the potential for supply disruptions to impact prices.