The Democratic Republic of Congo (DRC) has implemented a four-month suspension of cobalt exports, effective February 22, 2025, leading to a surge in global cobalt prices. As the world’s largest supplier, producing around 74% of mined cobalt, this decision has caused cobalt hydroxide prices to rise by 84% to $10.50 per pound, the highest level since July 2023, while cobalt metal prices climbed by 43%. The move is intended to stabilize a market that had been suffering from oversupply and multi-year low prices, but it has also disrupted global supply chains.

Cobalt is a critical component in lithium-ion batteries, essential for electric vehicles (EVs), consumer electronics like smartphones and laptops, and renewable energy storage. The suspension has led to increased costs for battery manufacturers, which could translate into higher prices for EVs, electronics, and energy storage systems. Major industry players such as CMOC Group, Glencore, and Eurasian Resources Group, which operate within the DRC, are now grappling with supply uncertainties. With more than 70% of the world’s cobalt originating from the DRC, industries are urgently seeking solutions to counteract the disruption.

While the suspension is currently set for four months, its impact could extend far beyond this period. Companies are exploring alternative sources, with Indonesia’s cobalt production rising by 50.7% in 2024, making it an increasingly attractive supplier. At the same time, the price surge may accelerate the adoption of cobalt-free battery technologies, such as lithium iron phosphate (LFP) batteries, which do not rely on cobalt. The geopolitical ramifications are also significant. China, which dominates cobalt processing, faces new pressures to secure alternative supply chains, while the U.S. and EU may intensify efforts to reduce their dependence on DRC cobalt and diversify their sourcing strategies.

If the DRC resumes exports as planned, cobalt prices may retreat, particularly if EV demand remains weaker than expected and industries continue shifting toward low-cobalt battery options. However, this suspension has exposed the vulnerabilities of relying on a single country for a critical resource, underscoring the need for supply chain diversification and innovation. The coming months will be crucial as global industries navigate the ripple effects of this export ban and adjust to a market that is experiencing unprecedented shifts.