Congo's Cobalt Quota Policy and Its Implications for Global EV Supply Chains

The Democratic Republic of Congo (DRC) has long held a pivotal role in the global cobalt market, producing over 70% of the world's supplyCongo considers cobalt export ban extension, quota plan faces delays^[1]. In 2025, the country's government has embarked on a dramatic policy shift, transitioning from a temporary export ban to a quota system aimed at stabilizing prices and managing supply. This move, while driven by domestic economic priorities, has profound implications for global electric vehicle (EV) supply chains, which rely heavily on cobalt for battery production. For investors in critical minerals and battery value chains, understanding the DRC's evolving regulatory framework—and its potential risks and opportunities—is essential to strategic positioning.

The Policy Transition: From Export Ban to Quota System

The DRC's initial four-month cobalt export ban, introduced in February 2025, was extended in June and again in September to address oversupply and historically low pricesDRC Implements Stringent Measures to Regulate Cobalt Industry^[2]. By September 2025, the government announced that the ban would end on October 15, 2025, with the introduction of a quota systemCongo to End Cobalt Export Ban in October, Introduces Quotas^[3]. Under this system, miners will be permitted to export 18,000 tons of cobalt in the remainder of 2025, with annual caps of 96,600 tons for 2026 and 2027Congo to End Cobalt Export Ban in October, Introduces Quotas^[3]. Quotas will be distributed pro-rata based on historical export volumes, with 10% reserved for projects deemed nationally strategicCongo to End Cobalt Export Ban in October, Introduces Quotas^[3].

The policy shift reflects a broader effort to balance domestic interests with global market dynamics. By restricting raw material exports and encouraging local processing, the DRC aims to capture more value from its mineral resources and reduce dependency on foreign refining hubs, particularly in ChinaDemocratic Republic of Congo likely to replace cobalt export ban with quotas^[4]. However, the success of this strategy hinges on the government's ability to enforce quotas effectively. As noted by industry experts, “the risk of cheating the system remains high, which could undermine the policy's effectiveness”DRC Considers Future of Cobalt Export Ban as September Deadline Approaches^[5].

Market Implications: Price Volatility and Supply Chain Adjustments

The DRC's export ban initially triggered a sharp price surge, with cobalt prices rising over 60% to $16 per pound by late September 2025DRC Extends Cobalt Export Ban Amid Global Supply Squeeze and Rising Prices^[6]. While this provided short-term relief to producers, it also created bottlenecks in global supply chains, particularly for EV manufacturers reliant on stable cobalt inputs. The quota system, if implemented rigorously, could help stabilize prices by aligning supply with demand. However, logistical challenges—such as separating artisanal and industrial production—complicate enforcementCobalt: After Pausing Exports, DR Congo Introduces Stockage and ...^[7].

The DRC's collaboration with Indonesia, the second-largest cobalt producer, adds another layer of complexity. Together, the two countries account for over 85% of global cobalt productionThe Democratic Republic Of Congo Extends The Suspension Of Cobalt Exports^[8]. A coordinated approach to supply management could amplify the DRC's influence on market dynamics, but divergent interests between the two nations may lead to fragmented policies. For instance, China's CMOC Group, the world's largest cobalt producer, has lobbied for the immediate removal of the DRC's export ban, while Glencore, the second-largest producer, supports the quota systemCongo Extends Cobalt Export Ban by Three Months^[9]. Such divisions highlight the tension between short-term market access and long-term price stability.

Strategic Positioning for Investors

For investors in critical minerals and battery value chains, the DRC's policy transition presents both risks and opportunities.

1. Hedging Against Supply Chain Disruptions: The quota system's success depends on the DRC's regulatory capacity. Investors should prioritize companies with strong governance frameworks and diversified cobalt sources. For example, firms with partnerships in Indonesia or other emerging producers (e.g., Australia, Canada) may mitigate exposure to DRC-specific risksDRC Cobalt Export Ban Disrupts Global Supply Chains^[10].

2. Investing in Local Processing: The DRC's push for value-added activities—such as refining and battery manufacturing—creates opportunities for investors in downstream sectors. Companies that secure contracts with the DRC's General Cobalt Company (EGC) or support ethical sourcing initiatives may benefit from long-term contracts and favorable regulatory treatmentKey Changes to the DRC Mining Code: A New Era for Investors and …^[11].

3. Monitoring Policy Enforcement: The risk of quota evasion remains a critical concern. Investors should closely track enforcement mechanisms and consider hedging strategies, such as forward contracts or price-linked derivatives, to manage volatilityDemocratic Republic of Congo likely to replace cobalt export ban with quotas^[12].

4. Leveraging Geopolitical Alliances: The DRC's collaboration with Indonesia underscores the importance of geopolitical dynamics in cobalt markets. Investors may benefit from analyzing bilateral agreements and their potential to influence global supply chainsDRC Considers Future of Cobalt Export Ban as September Deadline Approaches^[13].

Conclusion

The DRC's cobalt quota policy represents a bold attempt to reshape global supply chains in favor of domestic interests. While the policy's immediate impact has been price volatility and regulatory uncertainty, its long-term success could redefine the cobalt market's structure. For investors, the key lies in balancing exposure to the DRC's strategic initiatives with diversification across geographies and value chains. As the October 2025 implementation date approaches, vigilance in monitoring enforcement and market responses will be paramount.