A Democratic Republic of Congo (DRC) Ministerial Order banning the export of copper and cobalt concentrates, which additionally introduces a brand new tax regime, is unlikely to have a cloth influence on both the worldwide copper or cobalt market, however might add a near-term danger premium to copper costs whereas particulars of the coverage are clarified, BMI, a Fitch Options firm, 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, Overseas Commerce Minister Julien Paluku Kahongya and Financial system Minister Daniel Mukoko Samba.
The order, which was later launched publicly by the DRC Ministry of Mines, states that ‘the export of copper and cobalt concentrates is prohibited’ and takes impact instantly, though one-year waivers could also be granted below ‘strategic circumstances.’
The order additionally introduces a brand new tax regime for economically vital mining by-products, with a three-month transition interval.
BMI explains that because the mid-2010s, the DRC has operated a de facto ban on exports of unbeneficiated copper and cobalt concentrates, with advert hoc exemptions granted to pick out mining firms the place home processing capability was inadequate or the place stated firms dedicated to investing in native processing.
“We subsequently interpret the brand new coverage as a shift to a de jure ban with tighter guidelines round waivers and exemptions on the export of concentrates,” the corporate avers.
For copper, about 13% of the DRC’s copper exports final 12 months have been contained in concentrates, with a lot of the relaxation exported as refined copper cathodes, BMI factors out.
The previous equates to about 400 000 t of copper metallic, or about 1.7% of world copper mine manufacturing, it elaborates.
“Whereas a lack of this magnitude has the potential to push the fragile copper market steadiness into deficit, we word that the DRC ought to have some spare capability to smelt further copper concentrates domestically, given the current commissioning of the Kamoa-Kakula smelter, which has a nameplate capability of 500 000 t/y,” BMI predicts.
Presently, the Kamoa-Kakula mine is producing copper feedstock properly under the smelter’s nameplate capability, owing to the residual influence of a seismic incident final 12 months, which brought on a lot of the underground mine to flood.
Subsequently, there’s a risk for Kamoa-Kakula’s house owners, Ivanhoe Mines and Zijin Mining, to permit neighbouring copper mines to course of concentrates on the Kamoa-Kakula smelter if these miners are unable to barter waivers with Kinshasa, offered spare capability exists and third-party feed is technically and commercially viable, BMI hypothesises.
It notes that Ivanhoe themselves smelt a portion of their copper focus output on the close by Lualaba copper smelter, which is 60% owned by Mainland China’s CNMC.
“Because of this, we aren’t but revising down our DRC copper mine manufacturing forecasts for this 12 months or 2027, which we’ve got already revised down this 12 months following the aforementioned disruption at Kamoa-Kakula,” the corporate reassures.
In the meantime, it says that, for cobalt, the ban is “even much less impactful than for copper”.
In accordance with commerce knowledge revealed by the Congolese authorities, virtually all cobalt that leaves the DRC leaves as cobalt hydroxide, an intermediate product after focus however earlier than battery-grade cobalt, the corporate explains.
The extra essential coverage constraint stays the quota system launched after the short-term cobalt export ban final 12 months, it provides.
The DRC has set cobalt export quotas at 96 000 t for this 12 months, together with a ten% strategic allocation, equal to lower than half the DRC’s cobalt exports in 2024.
“Because of this, the focus ban ought to have a restricted incremental influence on the cobalt market until the authorities prolong restrictions to cobalt hydroxide,” BMI predicts.
It mentions a secondary danger as fiscal, relatively than bodily.
“The brand new order reportedly introduces a tax regime for economically vital mining by-products, which might have an effect on revenue margins at choose mining operations. Amongst different issues, this new measure might doubtlessly goal the beneficiaries of the current squeeze on provides of sulphuric acid, which some copper smelters within the DRC produce as a by-product,” the corporate cautions.
BMI highlights that this coverage shift has “injected recent bullish impetus into an already buoyant market”, with LME copper costs touching $14 369.50/t on August 6 (following the information stories) – the very best stage since January 29, when the purple metallic registered an all-time excessive of $14 528/t.
The ban comes amid sustained upward momentum on Comex, the place costs climbed to a recent report excessive of $14 781/t on August 5, lifting year-to-date good points to 18.2%, it provides.
“With copper now edging nearer to historic peaks and bullish sentiment over market tightness accumulating throughout a number of fronts, the close to time period trajectory for copper seems skewed firmly to the upside,” BMI predicts.
Copper costs have already averaged $13 228/t within the year-to date, as of August 6, and the corporate notes that upside dangers to its present worth forecast are constructing copper might common nearer to $13 500/t this 12 months.
“Copper is being buoyed by constructive sentiment in the direction of the worldwide economic system as hopes of a deal between the US and Iran are renewed, intense stocking up on the Comex as US tariff dangers mount, a barely weaker US greenback in current days, and the DRC’s announcement – regardless of its minimal materials influence on bodily commerce,” the corporate avers.
For cobalt, BMI maintains its cobalt worth forecast at $25/lb this 12 months and $22.50/lb in 2027, and continues to count on the DRC to elevate barely its cap on cobalt exports to about 120 000 t in 2027.
“As predicted, the quota system has not labored as supposed. After rising sharply within the aftermath of the export restrictions final 12 months, cobalt costs have principally traded sideways in 2026 as battery makers proceed to cut back reliance on cobalt-rich battery chemistries, whereas new sources of cobalt provide come on-line at blended hydroxide precipitate operations in Indonesia,” the corporate factors out.
“Moreover, we’re conscious of no main mining or processing firms asserting the development of latest battery-grade cobalt refineries within the DRC because the export restrictions have been put in place,” it provides.
BMI additionally warns that, extra broadly, this growth within the DRC reveals that useful resource nationalism within the continent is more likely to stay, with different international locations additionally following related trajectories.
“As commodity costs proceed to climb increased within the coming years, fuelled by the power transition, AI optimism and over a decade of underinvestment in new provide, useful resource nationalism is more likely to develop in each scale and scope,” it predicts.
