Chinese state owned mining company, MMG Ltd., has suspended operations at its cobalt processing plant in the Democratic Republic of Congo (DRC) just over a year after it began production.
The company said the decision was due to falling global cobalt prices, which have made operations unsustainable.
MMG confirmed in its annual report on Tuesday that the facility at the Kinsevere mine was placed on care and maintenance in December 2024.
The announcement comes shortly after the Congolese government imposed a four month export ban on cobalt to curb oversupply and regulate the metal’s price.
Market downturn forces halt in production
The Kinsevere expansion project, estimated to cost up to $600 million, was expected to enhance MMG’s copper output while introducing cobalt production.
However, a global supply glut driven largely by increased output from China’s CMOC Group Ltd. has led to a sharp decline in cobalt prices, forcing several mining firms to reassess their operations.
An MMG spokesperson stated that the company has adopted a “flexible production strategy” and will only restart cobalt processing when market conditions improve.
Meanwhile, the company remains focused on ramping up copper production at Kinsevere, targeting a 40% increase this year.
Despite the challenging market, MMG still managed to sell 1,600 tons of cobalt in 2024 before suspending operations at the plant.
Analysts suggest that recent policy changes, including the Congolese export ban, could help stabilize prices and improve profitability for producers.
Congo moves to control supply and stabilise prices
The DRC, which accounts for nearly 75% of the world’s cobalt production, introduced the export ban on February 24 in response to plummeting prices.
Authorities are also considering long-term policies such as export quotas to prevent market saturation and ensure sustainable pricing.
Since the ban was implemented, cobalt hydroxide prices have risen by 33%, reaching $7.60 per pound on March 5 the highest level since November 2023, according to Fastmarkets.
However, industry experts remain cautious, noting that demand from the electric vehicle (EV) sector has yet to rebound significantly.
