LONDON, May 3 (Reuters) – Uncertainty about the availability of cobalt concentrates from the Democratic Republic of Congo (DRC), the world’s largest ore producer, is pushing up prices for the metal at a time the market is already tight due to low supplies, traders said.
The price of high grade cobalt has risen steadily since the beginning of the year after hitting a 9-year low of $10 a pound in November and now stands at around $13.50/lb, up 30 percent from the lows and higher than $12/lb in March. .
Traders said the market was already tight, as producers were running low on stocks, when it emerged that the DRC planned to ban the export of raw materials of the metal used in batteries and in alloys for jet engines and gas turbines.
The African country in mid April banned exports of copper and cobalt concentrates to encourage miners to process and refine the red metal within its borders, according to an order from the Mines Ministry.
The order, seen by Reuters and dated April 5, provides companies 90 days to clear stocks before the ban is enforced, but a day later the governor of Katanga, Congo’s sole copper and cobalt mining province, said he would not enforce a new ban.
“Prices are nudging up due to the uncertainty and we’re seeing a bit of buying ahead of the ban coming into force in a market that is already tight,” said one physical trader.
“There seems to be some political flip-flopping going on with the ministry and the governor of the province. They did this before and the plans fell through,” said another.
Congo tried to introduce similar rules in 2007 and in 2010, but each time the decision was reversed and the practicalities of processing the ores in the country have come under scrutiny.
“They don’t have much electricity and that could pose a problem in terms of the process of refining the metal,” an industry source said.
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