Congo’s Cobalt Quotas: Navigating the Investment Landscape of a Critical Battery Metal

The Democratic Republic of Congo (DRC) holds over 70% of the world’s cobalt reserves, making it a crucial player in the global electric vehicle (EV) and battery industries. Cobalt is a key component in lithium-ion batteries, ensuring their stability and high energy density. As demand for EVs surges, the spotlight on Congo’s cobalt mining practices and export policies intensifies, creating both opportunities and challenges for investors. In 2024, the DRC produced nearly 220,000 tons of cobalt, highlighting its dominance in the global supply chain.

The Geopolitical Significance of Cobalt

Cobalt’s importance extends beyond its chemical properties; it’s a matter of international strategic concern. The DRC’s dominance in cobalt mining means that its political stability, regulatory environment, and ethical considerations directly impact the global energy transition. Reliance on a single nation with a history of instability introduces risks of supply disruptions, price volatility, and geopolitical manipulation.

Understanding Congo’s Cobalt Quota System

In response to a significant drop in cobalt prices, the DRC has implemented a quota system to manage its exports. This move follows a temporary export ban that began in February 2025 and was extended multiple times. The export ban caused cobalt prices to increase by 60% since February. The new quota system, effective October 16, 2025, allows miners to export a limited amount of cobalt:

Remaining of 2025: 18,125 tons
2026 and 2027: 96,600 tons annually

These quotas are intended to stabilize prices and encourage local processing of cobalt, aligning with the DRC’s goal of capturing more value from its mineral resources. The quota system is a bold attempt to reshape global supply chains in favor of domestic interests.

Impact on the Global EV Supply Chain

The DRC’s cobalt quotas have significant implications for the global EV supply chain:

Price Volatility: The export ban initially led to a sharp increase in cobalt prices, reaching over $35,000 per tonne in March 2025. The quota system aims to stabilize prices by aligning supply with demand.
Supply Chain Adjustments: EV manufacturers reliant on cobalt need to diversify their supply sources and explore alternative battery technologies to mitigate risks associated with supply disruptions.
Regional Competition: Indonesia has emerged as the second-largest cobalt producer due to the rapid expansion of its nickel industry. This trend highlights the potential for other regions to increase cobalt production and reduce reliance on the DRC.

Ethical Considerations and Supply Chain Risks

Cobalt mining in the DRC is associated with significant ethical concerns, including:

Child Labor: Reports indicate that children as young as seven work in hazardous conditions in artisanal mines.
Human Rights Abuses: Forced labor, low wages, and unsafe working conditions are prevalent in the cobalt mining sector.
Environmental Degradation: Mining activities can lead to deforestation, soil erosion, and water pollution, affecting local communities.

These ethical issues pose reputational risks for companies involved in the cobalt supply chain. To address these concerns, companies are implementing responsible sourcing policies, engaging with local communities, and supporting sustainable mining practices. Diversifying the cobalt supply chain is crucial for increasing resilience and reducing reliance on a single source.

Investment Strategies in the Cobalt Market

Investing in the cobalt market requires careful consideration of the risks and opportunities. Here are some potential investment strategies:

Cobalt Mining Companies: Investing in companies that mine or explore for cobalt can provide direct exposure to the metal’s price movements.
Commodity Streaming Companies: These companies provide financing to mining projects in exchange for a portion of the metal produced.
ETFs: Investing in exchange-traded funds (ETFs) that focus on commodities, mining, or battery technology can provide diversified exposure to the cobalt market.
Recycling Companies: Investing in companies that recycle cobalt from used batteries can capitalize on the growing demand for recycled materials.

When evaluating cobalt investments, it’s essential to consider factors such as:

Geopolitical Risks: The DRC’s political and regulatory environment can significantly impact cobalt supply and prices.
Ethical Sourcing: Companies with strong ethical sourcing practices are better positioned to mitigate reputational risks and maintain access to markets.
Technological Advancements: The development of cobalt-free batteries could reduce demand for cobalt in the long term.

Navigating the Evolving Landscape

The DRC’s cobalt quota policy represents a significant shift in the global cobalt market. While the policy aims to stabilize prices and promote domestic processing, it also introduces new risks and uncertainties. Investors need to stay informed about the evolving regulatory landscape, monitor market trends, and carefully assess the ethical and environmental considerations associated with cobalt mining.

By understanding the complexities of Congo’s cobalt quotas and the broader investment landscape, investors can make informed decisions and capitalize on the opportunities presented by this critical battery metal. Diversification, ethical sourcing, and a focus on long-term sustainability are key to navigating this dynamic market.