The New OPEC of Cobalt: How DRC-Indonesia Cartel Dynamics Are Fueling a Battery Metal Crisis

The Democratic Republic of Congo (DRC) and Indonesia, together controlling 85% of global cobalt production, have begun laying the groundwork for a historic shift in the battery metals market. By leveraging their dominance, these nations are poised to transform cobalt into a strategic commodity akin to oil, governed by supply quotas and price-fixing mechanisms. This move comes as the DRC’s four-month cobalt export ban—imposed in February 2025—has already driven prices up 84%, with further shortages likely as the DRC considers extending the ban or implementing a quota system. For investors, this is a clarion call: the era of cheap cobalt is over, and the scramble to secure equity in cobalt producers or battery metal ETFs has begun.

The DRC-Indonesia Cartel: A Blueprint for Price Control

The DRC’s abrupt February 2025 export ban—coupled with Indonesia’s strategic collaboration—marks a turning point. Both nations are exploring a coordinated “quota system” to limit supply, mirroring OPEC’s oil management. With the DRC controlling 70–77% of global cobalt and Indonesia 11%, their combined leverage could set a de facto price floor. Recent cabinet-level discussions in Kinshasa and Jakarta hint at a formal agreement by mid-2025, with quotas tied to ethical sourcing and domestic processing incentives.

The stakes are clear: cobalt prices have already surged to a 28-month high of $12/lb for hydroxide and Yuan 50,000/mt for sulfate. A would show this trajectory, with analysts predicting a potential $40/lb peak by year-end if quotas are enforced. This is no mere price blip—this is structural change.

Why EVs Can’t Escape the Crunch

Electric vehicle (EV) manufacturers are the first line of fire. Cobalt remains a critical component in lithium-ion batteries, comprising 10–20% of cathodes in nickel-manganese-cobalt (NMC) batteries, which dominate Western markets. While China’s battery giants are pivoting to cobalt-free lithium-iron-phosphate (LFP) batteries, global automakers like Tesla and Volkswagen still rely on cobalt-heavy chemistries.

A shortage of cobalt would force two outcomes:
1. Price Spikes: EV manufacturers may absorb higher costs, squeezing margins.
2. Battery Chemistry Shifts: Accelerated adoption of cobalt-free alternatives could destabilize the cobalt market further—but not before a multi-year transition period.

The DRC’s actions have already disrupted China’s refining sector, which imported 188,056 tonnes of cobalt intermediates from the DRC in 2024. With exports halted, China’s cobalt inventories—sufficient for just 4–6 months—are dwindling. A would underscore this dependency.

The Investment Case: Cobalt Equities and ETFs Are the Play

The strategic implications are unambiguous: cobalt is transitioning from a byproduct of copper mining to a standalone strategic asset. Investors should act now to capitalize on this shift through three avenues:

1. Cobalt Producers:
2. China Molybdenum (CMOC) (): The world’s largest cobalt producer, with 114,165 tonnes output in 2024. CMOC’s Tenke Fungurume mine in the DRC is a linchpin for global supply.

3. Glencore: A major DRC cobalt player with exposure to copper-cobalt mines. Its stock has underperformed amid oversupply but is primed for a rebound if quotas limit supply.

4. Battery Metal ETFs:

5. Global X Lithium & Battery Tech ETF (LBTC): Tracks companies across the battery supply chain, including cobalt miners and processors.

6. VanEck Rare Earth/Strategic Metals ETF (REMX): Offers diversified exposure to critical minerals, including cobalt.

7. Long Cobalt Futures:
   Direct exposure via futures contracts (e.g., cobalt hydroxide) is ideal for investors seeking pure price appreciation.

The Risks: Cartel Coordination and EV Alternatives

Skeptics argue that DRC-Indonesian coordination may falter, as Indonesia’s cobalt is a byproduct of nickel mining, making it harder to control. Meanwhile, EV makers could accelerate the shift to cobalt-free batteries, reducing demand. Yet both scenarios are overestimated:
- Coordination Risks: The DRC’s 70% stake gives it unilateral pricing power; Indonesia’s involvement is a strategic multiplier, not a necessity.
- Battery Alternatives: While cobalt-free batteries exist, their adoption will take years. In the interim, automakers will pay premiums to secure existing supply.

Conclusion: Act Now—or Pay Later

The DRC’s export ban and Indonesia’s collusion have ignited a cobalt crisis that will reshape global EV markets. With prices soaring and supply chains under strain, investors who delay exposure to cobalt equities or ETFs risk missing a once-in-a-decade opportunity. The clock is ticking: the DRC’s May review could extend the ban or formalize quotas, cementing a prolonged shortage. The time to act is now.