Congo launches the "national trusteeship" model: Nearly 10,000 tons of cobalt will be extracted by 2026, shifting the global cobalt price "center of volatility" upwards?

The Democratic Republic of Congo's national mineral monitoring agency announced on Thursday that the country has established strategic reserves of cobalt and other key minerals. This move marks the official launch of the country's national stockpiling mechanism, which aims to alleviate the long-term downturn in cobalt prices and strengthen core control over global supply and pricing through a combination of "hoarding spot market + regulating quotas". According to a statement from the agency, under a decree passed by the cabinet on April 10, the management rights of the strategic reserves have been transferred to the market regulatory agency ARECOMS, which is now authorized to purchase, hold, and sell strategic minerals. Congo is the world's largest producer of cobalt, which is a key component of electric vehicle batteries, accounting for about 70% of global supply last year. Export quotas transferred for national strategic use: Precision reduction of circulating supply Earlier last year, the country implemented a several-month export ban, which was later replaced with a quota system in October to address the price plummet caused by oversupply. Data shows that in the first quarter of this year, Congo shipped about 48,800 tons of cobalt, compared to about 123,000 tons shipped in the same period last year, before the four-month export freeze. Under the quota framework, Congo stated that 10% of the national cobalt export volume will be reserved for national strategic use. For example, by 2026, this means that at least 9,600 tons of physical cobalt will be "forcibly withdrawn" from circulation. Analysts believe that this reduction may offset some of the excess expectations and provide support for cobalt prices. The regulatory agency also warned miners that any export quotas not shipped within the specified timeframe will be transferred to the government's strategic quota. Companies that fail to export their allocated quotas for the fourth quarter of 2025 by April 30 and for the first quarter of 2026 by the end of June will lose these quotas and they will be transferred to the reserves. This dynamic recovery mechanism means that the government can gradually accumulate spot resources based on market conditions to enhance its regulatory capacity. Under a decree from 2018, Congo classified cobalt, coltan, tantalum, iron ore, and germanium as strategic minerals, effectively subjecting their production and export to stronger national supervision. The strategic reserves announced on Thursday will serve as a tool for the government to manage its quota levels. The world's two largest cobalt producers, China's CMOC Group Limited and Glencore with ERG, Zhejiang Huayou Cobalt, and Sicomines, a Chinese-controlled miner, also operate in Congo. From "price takers" to "price makers": The rules of the game may see adjustments ARECOMS stated that the strategic reserves provide the government with additional means to intervene in the global cobalt market, complementing the quota policy aimed at rebalancing prices. "This will allow the Congolese government to intervene selectively in the amount of strategic minerals available to maintain market balance internationally, and help strengthen its economic sovereignty." Congo is the world's largest cobalt producer, accounting for about 70% of global supply, but for a long time, Congo (Kinshasa) has been seen as a "battlefield" of geopolitical games rather than a "participant". The establishment of strategic reserves this time means that Congo is no longer satisfied with merely "limiting" through quotas, but is beginning to have the ability to influence the global market through national will, actively hoarding and opportunistically selling, becoming a "super buyer" and "strategic seller" in the market, and gaining new bargaining chips in international negotiations. It is worth noting that looking at Congo's policy path over the past two years, from last year's temporary export ban, to the annual export quota system in October last year, to this year's strategic cobalt reserves, these three steps constitute a complete supply-side control loop: quotas restrict the "total water faucet", reserves absorb the "excess water", and the government decides when to open and close the valve based on price levels. Downstream risks: Shifting from cost fluctuations to rising supply uncertainties For downstream industries, they may face strategic supply risks instead of controlled costs. Cobalt is a core raw material for electric vehicle batteries, high-temperature alloys, aerospace engines, hard alloys, and other high-end manufacturing. By allocating 10% of export quotas (approximately 9,600 tons in 2026) to strategic reserves, Congo is further reducing the global supply of cobalt available for circulation. Combined with chemical supply disruptions and skyrocketing transportation costs caused by the US-Iran conflict, downstream companies may face lowered availability of raw materials, intensified price fluctuations, power shifts in long-term contract negotiations, and other multiple pressures. There is a possibility of upward movement in cobalt prices, and the cost logic of the global new energy and high-end manufacturing industries may need adjustment.