Cobalt's 30% Slide Puts D.R. Congo's Quota Gamble to the Test

• The policy: an export ban from February to October 2025, then quotas capping exports at 96,600 tonnes a year for 2026 and 2027. Producers share 87,000 tonnes pro rata and ARECOMS holds a 9,600-tonne strategic quota, with power to adjust quarterly and buy back excess output.

• The rally: cobalt hydroxide more than quadrupled by April 2026.

• The slide: hydroxide fell 31% in the third quarter (Benchmark); cobalt traded at $39,140 per tonne on 29 September, down about 30% in a month; cobalt sulphate fell nearly 30%.

• The causes: rising Congolese exports, weak downstream demand and discounted recycled material.

• The state's own supply: EGC exported 3,531 tonnes of contained cobalt in the first half of 2026, becoming Congo's fifth-largest hydroxide exporter, and has filled its quota.

• The decision: ARECOMS said on 11 August that a quota cut may be considered if the imbalance persists or worsens. Watch for a revision in October.

• Trade law: export quotas sit uneasily with GATT Article XI, and price-driven quotas fared badly in the China raw materials and rare earths cases. Stability clauses and investment treaties add producer-side legal risk.

Why Congo can move the market?: The Democratic Republic of Congo supplies about 70% of the world's cobalt, mostly as cobalt hydroxide, an intermediate product shipped largely to China for refining into battery chemicals. Years of rising output, led by large copper-cobalt mines, created a global surplus and pushed prices sharply lower by early 2025.

The legal foundations. Under the framework of its 2018 Mining Code, Congo has designated cobalt a strategic substance, a category that allows tighter state control over production and trade. Export policy is administered by ARECOMS, the Authority for the Regulation and Control of Strategic Mineral Substances Markets, chaired by Patrick Mpoyi Luabeya.

The policy timeline:

ARECOMS's powers. The quota framework lets ARECOMS:

• adjust quota volumes quarterly;

• allocate its strategic quota at its sole discretion;

• buy back cobalt produced beyond an operator's export allowance, a potential state buffer stock; and

• adjust allocations if prospects arise for local processing of hydroxide into higher-value products.

The result is a state-managed supply system for a critical mineral. In effect, ARECOMS is designed to act as a market balancer, absorbing surplus when prices are weak and releasing it when they are high.

The rally fades. On 4 September 2026, Bloomberg reported that cobalt's rally was reversing as Congolese exports picked up under the quota regime, testing Kinshasa's ability to control prices. By the end of the quarter the decline was steep.

What drove it. Three forces combined:

• More Congolese exports. Shipments under the quota regime picked up through the summer, adding supply to a market that had been starved of hydroxide.

• Weak downstream demand. Refiners and battery-chemical buyers held back. Benchmark reported no confirmed hydroxide trades for ten days in August, and a widening gap between buyers' bids and sellers' offers.

• Recycled material. Recyclers discounted cobalt sulphate, pulling prices lower ahead of China's Golden Week holiday.

The state's own channel adds supply. Supply growth is coming partly from the state itself. Entreprise Générale du Cobalt (EGC), the Gécamines subsidiary with a state-granted monopoly on buying and exporting artisanal cobalt, told Fastmarkets its exports spiked in the first half of 2026 as the government formalised the artisanal sector:

Artisanal miners account for about 15% to 25% of Congo's cobalt output. Bringing them into a formal, traceable channel advances responsible-sourcing goals, but it also turns previously informal supply into measured, exportable volume within the quota system.

The underlying balance. Not everyone reads the slide as a lasting turn. Analysts note that the market could still face a deficit in 2026 under the quota regime. Benchmark had earlier projected that quotas would reduce ex-Congo cobalt stocks to around one month of demand by the fourth quarter of 2026.

The signal. On 11 August 2026, ARECOMS chairman Patrick Mpoyi Luabeya told Fastmarkets that Congo may reduce its cobalt export quota if the supply-demand imbalance persists or worsens. He added that quotas for 2026 and 2027 had been set to preserve market balance. The quarterly adjustment power gives ARECOMS the legal tool to act. The price slide since then has made the question live.

The options:

The constraints. A quota cut cannot ignore three realities:

1. Indonesia. Indonesian nickel-cobalt output, particularly mixed hydroxide precipitate (MHP), gives buyers an alternative. Sustained high prices for Congolese hydroxide accelerate that shift.

2. Fiscal revenue. Royalties and export revenues depend on both volume and price. Cutting volume to lift price only pays if the price response is strong enough.

3. Credibility. The regime's value depends on predictability. Frequent changes, administrative glitches and cancelled allocations raise the risk premium on Congolese supply.

What a revision would look like. Because ARECOMS can adjust quotas quarterly, an October decision would most likely take the form of a revised fourth-quarter or 2027 allocation, announced by ARECOMS communiqué. Producers, traders and buyers should watch for that announcement in October.

1. Export quotas and the WTO

Congo is a WTO member. GATT Article XI generally prohibits export quotas and bans, as distinct from export duties. The exceptions are narrow:

In China – Raw Materials and China – Rare Earths, WTO panels and the Appellate Body found China's export restrictions on minerals inconsistent with WTO rules, rejecting conservation defences where the measures were not even-handed with domestic restrictions. A quota system whose stated purpose is to reduce a glut and support prices would face similar difficulty if challenged. With the WTO's appeal system not functioning, however, a challenge would have limited practical force.

2. Investment protections and contractual stability

Large miners operate under mining titles and conventions that may include stability clauses, protecting them from adverse changes in the fiscal and customs regime for a period. Quotas that cut exports below what operators could otherwise ship raise questions under those clauses and under bilateral investment treaties. Several producers declared force majeure on contracts during the 2025 export ban. Administrative actions, such as cancelling unshipped quotas after a customs-platform failure, add another layer of potential dispute.

3. A state monopoly in the artisanal segment

EGC holds a state-granted monopoly on buying and exporting artisanal cobalt. Within the quota regime, that makes the state both regulator, through ARECOMS, and supplier, through EGC and its parent Gécamines. That dual role requires transparent and non-discriminatory allocation, a point EGC's chief executive addressed directly when he said no operator received preferential treatment under the quota system.

4. Responsible sourcing and due diligence

Buyers in Europe, the United States and Asia face growing supply-chain due-diligence expectations for cobalt, rooted in OECD guidance and, for the EU, battery regulation. Artisanal cobalt has long been avoided because of child-labour and traceability concerns. EGC's formal, traceable channel is designed to meet those expectations, and its push for direct deals with battery makers will test whether downstream buyers accept formalised artisanal supply.

5. Critical minerals geopolitics

Cobalt is classed as a critical mineral by the US, EU and others. Supply controls by the dominant producer intensify efforts to diversify, through Indonesian supply, recycling and new mine development, and give weight to logistics routes such as the Lobito Corridor, which carries Congolese copper and cobalt to the Atlantic through Angola.

Large cobalt producers in Congo

They benefit when quotas lift prices, but face volume limits, administrative risk and the possibility of further cuts. The June–July episode, when unused second-quarter quotas were cancelled after a customs-platform glitch, shows how quickly allowance can be lost. They should ship allocations early in each period, document any administrative obstacles, review stability clauses in their mining conventions, and prepare for an October revision.

Smaller and mid-tier producers

Pro-rata allocations based on historical exports can squeeze producers that are expanding or newly in production. Any cut falls proportionately on them too. They should engage ARECOMS on allocation methodology and the use of the strategic quota.

EGC and artisanal miners

EGC has filled its quota and is seeking direct deals with battery makers. For the estimated 1.5 to 2 million people in artisanal cobalt, formalisation promises safer conditions and traceable sales, but the quota cap limits how much formal artisanal cobalt can be exported. A quota cut could hit artisanal livelihoods as well as industrial output.

Traders (Trafigura, Mercuria, Traxys and others)

Price volatility, administrative deadlines and possible quota changes complicate offtake planning. Traders should build quota and regulatory risk into contracts, including price adjustment, delay and force majeure clauses.

Chinese refiners and battery-chemical producers

They process most Congolese hydroxide. Lower prices ease input costs for now, but a quota cut could tighten supply again. Diversification into Indonesian MHP and recycled feed reduces dependence on Congolese policy.

Battery makers and automakers

Cobalt price swings feed into battery costs, especially for nickel-manganese-cobalt chemistries. Supply controls reinforce the case for lower-cobalt chemistries and recycling, while EGC's traceable artisanal supply offers a new sourcing option if it meets due-diligence standards.

Western governments and investors

Congo's quotas show how a dominant producer can use export controls on a critical mineral. That strengthens the case for diversified supply, strategic stockpiles and partnerships with producer countries, and gives weight to infrastructure such as the Lobito Corridor.

The Congolese state

The trade-off is volume against price, revenue now against market share later, and control against credibility. Clear, predictable decisions by ARECOMS will matter as much as the quota level itself.

Lawyers and advisers

The work includes quota-allocation disputes, stability-clause and investment-treaty analysis, offtake contract drafting under regulatory risk, force majeure claims, and due-diligence frameworks for artisanal supply.

Why did cobalt prices fall in September 2026? Exports from Congo picked up under the quota regime while downstream demand stayed weak. Benchmark Mineral reports cobalt hydroxide fell 31% over the third quarter.

What are Congo's cobalt export quotas? An annual cap of 96,600 tonnes for 2026 and 2027: 87,000 tonnes allocated to producers based on historical exports and 9,600 tonnes held as a strategic quota by ARECOMS. Quotas replaced an export ban that ran from February to October 2025.

Can Congo cut the quotas? Yes. ARECOMS can adjust quota volumes quarterly, and its chairman said in August that a cut may be considered if the supply-demand imbalance persists or worsens.

What is EGC? Entreprise Générale du Cobalt, a Gécamines subsidiary with the state monopoly on buying and exporting artisanal cobalt. It exported 3,531 tonnes of contained cobalt in the first half of 2026.

Are Congo's export quotas consistent with WTO rules? Export quotas are generally prohibited by GATT Article XI, and exceptions are narrow. WTO rulings in the China raw materials and rare earths cases suggest price-driven quotas would be hard to defend, but enforcement is limited while the WTO appeal system is not functioning.