This audio is brought to you by Endress and Hauser, a global leader in process and laboratory measurement technology, offering a broad portfolio of instruments, solutions and services for industrial process measurement and automation. A Democratic Republic of Congo (DRC) Ministerial Order banning the export of copper and cobalt concentrates, which also introduces a new tax regime, is unlikely to have a material impact on either the global copper or cobalt market, but could add a near-term risk premium to copper prices while details of the policy are clarified, BMI, a Fitch Solutions company, posits. On August 6, Reuters reported that the DRC has banned exports of copper and cobalt concentrates, citing a joint Ministerial order dated June 29, signed by Mines Minister Louis Kabamba Watum, Foreign Trade Minister Julien Paluku Kahongya and Economy Minister Daniel Mukoko Samba. The order, which was later released publicly by the DRC Ministry of Mines, states that 'the export of copper and cobalt concentrates is prohibited' and takes effect immediately, although one-year waivers may be granted under 'strategic circumstances.' The order also introduces a new tax regime for economically significant mining by-products, with a three-month transition period. BMI explains that since the mid-2010s, the DRC has operated a de facto ban on exports of unbeneficiated copper and cobalt concentrates, with ad hoc exemptions granted to select mining companies where domestic processing capacity was insufficient or where said companies committed to investing in local processing. "We therefore interpret the new policy as a shift to a de jure ban with tighter rules around waivers and exemptions on the export of concentrates," the company avers. For copper, about 13% of the DRC's copper exports last year were contained in concentrates, with most of the rest exported as refined copper cathodes, BMI points out. The former equates to about 400 000 t of copper metal, or about 1.7% of global copper mine production, it elaborates. "While a loss of this magnitude has the potential to push the delicate copper market balance into deficit, we note that the DRC should have some spare capacity to smelt additional copper concentrates domestically, given the recent commissioning of the Kamoa-Kakula smelter, which has a nameplate capacity of 500 000 t/y," BMI predicts. Currently, the Kamoa-Kakula mine is producing copper feedstock well below the smelter's nameplate capacity, owing to the residual impact of a seismic incident last year, which caused much of the underground mine to flood. Therefore, there is a possibility for Kamoa-Kakula's owners, Ivanhoe Mines and Zijin Mining, to allow neighbouring copper mines to process concentrates at the Kamoa-Kakula smelter if those miners are unable to negotiate waivers with Kinshasa, provided spare capacity exists and third-party feed is technically and commercially viable, BMI hypothesises. It notes that Ivanhoe themselves smelt a portion of their copper concentrate output at the nearby Lualaba copper smelter, which is 60% owned by Mainland China's CNMC. "For this reason, we are not yet revising down our DRC copper mine production forecasts for this year or 2027, which we have already revised down this year following the aforementioned disruption at Kamoa-Kakula," the company reassures. Meanwhile, it says that, for cobalt, the ban is "even less impactful than for copper". According to trade data published by the Congolese authorities, almost all cobalt that leaves the DRC leaves as cobalt hydroxide, an intermediate product after concentrate but before battery-grade cobalt, the company explains. The more important policy constraint remains the quota system introduced after the temporary cobalt export ban last year, it adds. The DRC has set cobalt export quotas at 96 000 t for this year, including a 10% strategic allocation, equivalent to less than half the DRC's cobalt exports in 2024. "As a result, the concentrate ban shou...
