Cobalt Supply Chain Dynamics Amid DRC's New Export Quota System

The Democratic Republic of the Congo (DRC) has long dominated the global cobalt market, supplying over 70% of the world's raw cobalt. In a pivotal shift, the DRC has replaced its full cobalt export ban with a quota system effective October 16, 2025, according to African Security Analysis. This policy recalibration aims to stabilize prices, curb unregulated mining, and prioritize domestic processing. For investors, the implications are profound, reshaping supply chains and creating both risks and opportunities in the short and long term.

Quota System: Structure and Strategic Intent

Under the new framework, the DRC will permit 18,125 tonnes of cobalt exports in 2025, distributed as 7,250 tonnes per month for October, November, and December. For 2026 and 2027, the annual quota rises to 96,600 tonnes, with 9,600 tonnes reserved as a "strategic quota" for national projects, as reported by Discovery Alert. Quotas are allocated pro-rata based on historical export volumes from 2022–2024, according to Fastmarkets, ensuring established players retain a foothold while limiting new entrants.

ARECOMS, the DRC's regulatory authority, holds exclusive control over the strategic quota and can adjust allocations quarterly to address market imbalances. Non-compliant companies face quota revocation, and Cobalt Blue Holdings notes that ARECOMS may repurchase excess stocks to prevent oversupply. This centralized approach signals the DRC's intent to assert control over its cobalt resources, balancing economic interests with geopolitical leverage.

Immediate Market Implications

The quota system's rollout has already triggered volatility. By capping 2025 exports at 18,125 tonnes-well below the 2024 production of ~140,000 tonnes noted by African Security Analysis-the DRC is effectively redirecting cobalt toward domestic processing. This could tighten global supply, particularly for international buyers reliant on raw material imports. Analysts predict a global cobalt deficit by 2026, with prices rising as demand outstrips regulated supply.

Regional impacts will vary. Chinese manufacturers, who dominate cobalt refining, may face higher procurement costs as the DRC prioritizes value-added processing. European and U.S. firms, meanwhile, could benefit from increased investment in DRC-based partnerships or recycling technologies to offset raw material constraints.

Strategic Positioning for Investors

Investors must navigate a dual reality: near-term scarcity and long-term structural shifts. Key opportunities include:

1. DRC-Based Processing Firms: Companies with refining capabilities in the DRC, such as those partnered with ARECOMS, are positioned to capture the strategic quota. These entities stand to profit from both raw material access and government-backed projects (Discovery Alert).
2. Long-Term Contracts: Firms securing multi-year supply agreements with DRC producers will gain stability amid quota-driven uncertainty. Such contracts mitigate exposure to quarterly adjustments by ARECOMS (Fastmarkets).
3. Recycling and Substitution Technologies: As supply tightens, demand for cobalt recycling and battery chemistries with lower cobalt content (e.g., LFP) will rise. Investors in these sectors can hedge against price spikes (Cobalt Blue Holdings).

However, risks persist. Regulatory overreach by ARECOMS, geopolitical tensions, or unregulated artisanal mining could undermine the quota system's effectiveness. Diversifying supply chains and monitoring DRC policy updates will be critical.

Conclusion

The DRC's quota system marks a turning point in cobalt geopolitics. By curbing unregulated exports and prioritizing domestic processing, the DRC is reshaping global supply chains to its advantage. For investors, the path forward requires agility: capitalizing on DRC-based opportunities while hedging against volatility through diversification and innovation. As the 2026 deficit looms, strategic positioning today will define market resilience tomorrow.