Glencore has halted certain cobalt exports due to the Congo export ban

Three sources familiar with the situation said that Glencore declared force majore on certain deliveries of cobalt from the Democratic Republic of Congo, days after the government had suspended exports of battery material.

In February, Congo, the largest cobalt-producing country in the world, introduced a ban of four months on all exports. The move was made to reduce a glut in supply that had pushed prices down to their lowest levels in nine years and reduced tax revenue.

Sources said that as a result, London-listed Glencore declared force majeure in some agreements to supply cobalt from its Congolese operations. This is a rare move, which can be used for unexpected circumstances that prevent the execution of a contract.

A Glencore spokesperson responded to a comment request on Wednesday by stating that all customers of the company were receiving cobalt in accordance with their contracts.

Glencore, which is the second largest cobalt producer in the world, produced 35,100 tons of cobalt hydroxide and concentrate at its Congo operations.

Sources claim that many of the customers still receive cobalt as part of their contracts.

Cobalt, a by-product of copper production, was produced in Congo. This country accounted for 78% of the global cobalt production last year, with 220,000 tons.

Metal is used in the manufacture of parts for military and aerospace equipment. The majority of cobalt produced by Congo is in the form of hydride, which is used as a chemical to produce batteries for electric vehicles and mobile phones.

In February, cobalt prices fell to almost $10 a pound - or $22,000 a metric ton - due in part to a surge of supply from the CMOC Group's operations.

Since then, the export ban imposed by Congo and the declaration of force majeure by Eurasian Resources Group in March have helped to boost prices by 35%. They now trade at $15.80 per pound on Wednesday or $34,832 per ton.

Congo hasn't said if export suspensions will be extended after the June 22 ban, or if it would consider export quotas. (Reporting and editing by Veronica Brown, Joe Bavier and Pratima Dasai)

(source: Reuters)