Congo's Cobalt Gambit: Navigating US-China Rivalry for Strategic Mineral Dominance

The Democratic Republic of the Congo (DRC) holds a staggering 60% of the world’s cobalt reserves, a mineral critical to electric vehicle (EV) batteries and clean energy transitions. Yet, its geopolitical maneuvering in early 2025—marked by a sudden cobalt export ban and infrastructure overtures to the U.S.—has thrown global supply chains into disarray. For investors, this is no mere blip: it’s a seismic shift in the battle for control of critical minerals. With China’s grip on Congolese mines and U.S. countermeasures gaining traction, the DRC’s cobalt gambit presents both peril and opportunity. Here’s how to navigate it.

The Export Ban: A Geopolitical Reset

In February 2025, the DRC imposed a four-month cobalt export ban to counter Chinese firms’ market dominance, which had driven prices down and eroded state revenues. The move, echoing OPEC’s supply-control strategies, signals a new era of resource nationalism. Market participants now anticipate a permanent quota system, stabilizing prices but introducing volatility as the DRC balances political needs with economic realities.

Investors should monitor this closely. A quota system could boost long-term cobalt prices, favoring producers with direct access to DRC reserves. Conversely, delayed policy clarity risks stranding assets in projects like ERG’s Metalkol mine, which declared force majeure after the ban.

Infrastructure as a Weapon: U.S. vs. China

The DRC’s pivot toward the U.S. hinges on infrastructure deals that could reshape supply chains. The Lobito Corridor, a U.S.-backed railway linking the DRC’s copper belt to Angola’s Lobito Port, exemplifies this strategy. Once operational, it promises to slash transport times for cobalt and copper, reducing reliance on South African ports dominated by Chinese trade routes.

However, this project faces hurdles. DRC officials fear foreign control over strategic assets, while regional conflicts—such as Rwanda’s support for M23 rebels—threaten stability. Meanwhile, China retains a stranglehold: its firms own 15 of the DRC’s top cobalt/copper mines, including the massive Tenke Fungurume (TFM) mine, which alone supplies 15% of global cobalt.

Risks: Overplaying the Sovereignty Card

The U.S. approach is not without flaws. Its reliance on institutions like the Development Finance Corporation (DFC) to fund infrastructure has yet to yield results, with projects delayed by corruption and bureaucratic inertia. The DRC’s energy deficit—only 20% of the population has electricity—further stifles mining output. Meanwhile, China’s infrastructure-for-resources model, though criticized for opacity, delivers tangible results, such as the TFM mine’s $2.5 billion expansion.

Investors must weigh these risks. Overestimating U.S. progress could lead to losses in greenfield projects, while ignoring China’s entrenched position risks missing out on near-term gains.

Opportunities: Where to Bet Now

1. Cobalt Stocks with Direct DRC Ties:
2. Companies like First Quantum Minerals (FMG.TO) and Kobold Metals (KBM.TO) are advancing projects in the DRC’s cobalt-rich Katanga Province. Their success hinges on navigating DRC’s quota system.

4. U.S. Infrastructure Plays:

5. Firms involved in the Lobito Corridor, such as Trafigura (TRAI.SW), benefit from reduced transport costs and geopolitical alignment with the U.S.

6. Diversification:

7. Hedge against DRC instability by investing in cobalt recycling (e.g., Redwood Materials) or alternative battery chemistries like lithium-iron-phosphate (e.g., Contemporary Amperex Technology CATL).

8. Geopolitical Arbitrage:

9. Short positions in Chinese cobalt giants (e.g., CMOC) could profit if the DRC’s quota system restricts exports.

Conclusion: The Prize of the New Energy Age

The DRC’s cobalt gambit is not just about minerals—it’s about who controls the levers of the EV revolution. For investors, the calculus is clear: the risks of overexposure to China’s dominance are high, but so are the rewards of backing U.S.-aligned infrastructure and producers. Act now, or risk being sidelined in the race for the planet’s most prized resource.

The stakes have never been higher. The DRC’s cobalt is the oil of the 21st century—own a piece of it, or be left behind.