Is the cobalt market about to undergo a drastic change? After the suspension of exports from the Congo, a manual cobalt mine monopoly will be implemented.

The Democratic Republic of the Congo is beginning to implement a long-awaited monopoly plan to control the production of artisanal cobalt mining by utilizing the country's dominant position in the global cobalt supply to further drive up the price of this battery metal. According to new regulations signed by the Prime Minister and Minister of Mines on February 21, the state-owned company EGC (General Enterprise of Cobalt) has become the sole entity authorized to export so-called artisanal cobalt. At the same time, the government has also implemented a four-month ban on the export of various cobalt mines, which could lead to a surge in cobalt prices. These measures mark unprecedented efforts by this Central African country to regain control of the cobalt market. Previously, a sharp increase in production from major industrial mines led to a collapse in cobalt prices. As profits drastically decreased, artisanal cobalt production plummeted, cutting off an important but often dangerous source of income for hundreds of thousands of people in the Congo. EGC CEO Eric Karala stated on Wednesday that EGC is considering buying cobalt ore from artisanal miners during the ban period and building up stocks "so that their activities are not affected by the ban." The strategic mineral market regulatory agency ARECOMS stated on Monday that independent processing plants that usually purchase cobalt ore from artisanal miners "will not be allowed to export cobalt" once the ban is lifted, and their export licenses should be "immediately revoked." Karala said these processing plants can collaborate with EGC to process cobalt ore and continue refining copper and other metals. He revealed that there are more than 20 such plants in the southeast of the Congo. EGC's monopoly on artisanal or semi-industrial cobalt mining will not affect large industrial mining enterprises active in the Congo, such as Glencore, CMOC Group Limited, and Eurasian Resources Group. These companies are responsible for the majority of cobalt production in the country, accounting for about three-quarters of global supply. The increased production from two large mines operated by CMOC Group Limited in the Congo led to an oversupply of cobalt, causing prices to plummet. The price drop forced many Congolese artisanal miners to switch to other minerals, including gold and copper. The professional trading company Darton Commodities estimates that artisanal cobalt mining production has fallen to 4,400 to 5,000 tons by 2024, accounting for only 2% of the country's total production. In contrast, when cobalt prices reached historic highs in 2018, artisanal cobalt production exceeded 21,000 tons. This major informal industry provides a livelihood for hundreds of thousands of Congolese, indirectly affecting many more, but is often criticized for the dangerous working conditions and child labor issues. EGC's attempt is seen as a government initiative to address these issues and ensure a reliable supply of clean cobalt, especially when prices are high. The new ministerial decree stipulates that EGC "exercise exclusive rights to purchase and trade artisanal metals." This state-owned company can achieve this goal "directly or through partnership, or entrust all or part of its activities to one or more other companies." According to the new regulations, industrial mining enterprises are now "strictly prohibited" from mixing their minerals with uncertified artisanal cobalt. The regulations also allow companies to collaborate with EGC, open up certain areas for artisanal mining within the permitted range, without fear of penalties. Karala stated that this may help address the common problem of artisanal miners infiltrating industrial mining areas to illegally extract ore.