Sources: ERG declares force majeure for cobalt supplies from Congo
Two sources with knowledge of the situation said that Eurasian Resources Group has declared force majeure for deliveries of cobalt battery material from its Metalkol operations due to the temporary export ban by the Democratic Republic of Congo.
ERG is the largest cobalt producer in Congo. This is also the top mineral producing country worldwide for the production of lithium-ion battery powering electric vehicles.
One source said that the Luxembourg-based firm had to declare force majore, a status which indicates unexpected circumstances prevented them from fulfilling contract obligations, because they did not have cobalt outside of Congo.
ERG has not responded to comments immediately.
Last month, the Congo government suspended exports of cobalt for four months in order to curb oversupply. The surpluses had caused prices to plummet to a nine-year low, around $10 per metric ton.
Darton Commodities estimates that ERG's Metalkol, which processes tailings, produced approximately 19,200 metric tonnes of cobalt hydroxide last year. This is around 9% the total production of Congo.
Metalkol's production of cobalt accounted for 7% of global cobalt output, or more than 288,000 last year. This is according to Darton a specialist cobalt metal supplier.
Sources in the cobalt industry said that it was unclear when the force majeure was invoked. However, prices of cobalt have increased as buyers are becoming increasingly concerned about supply.
Shanghai Metals Markets' (SMM) assessment of the price of cobalt used in electric vehicle batteries has risen to 200,000 Yuan
The Congo's Authority for the Regulation and Control of Strategic Mineral Substances' Markets' (ARECOMS), announced the ban. It will be reviewed within three months and, depending on the results, could be either modified or terminated.
Sources say that the Congo government plans to implement quotas for exports, which will be negotiated in the period of export suspension. CMOC Group, a Chinese company, is the DRC's largest cobalt producer, with 114,165 tonnes produced last year. This was more than twice the amount of cobalt it produced in 2023. Glencore, a commodity trader and miner from Canada, is the DRC's second-largest producer with 38.200 tons of cobalt in 2024. This was down 8% on the previous year.
CMOC Glencore ERG are the top three producers of cobalt in the world.
(source: Reuters)
