Sources say that China's CMOC has called on Congo to lift the cobalt export prohibition.

Three sources said that China's CMOC group, the world's largest cobalt mining firm, called on the Democratic Republic of Congo to lift a current export ban for battery metal due to expire in the next month.

Congo, which is the world's largest cobalt producer, implemented the four-month-long ban in February to try to reduce surpluses after cobalt prices reached a nine-year low of around $10 per lb or $22,000 per metric ton. .

Sources said that CMOC Vice President Kenny Ives, during a closed session at an industry conference in Singapore, told delegates that Congo should remove the export restrictions on metals, which are an important component in batteries for electric vehicles.

Sources who heard Ives speak said that Kizito Pakabomba, the Congo Mines Minister, was present at the session.

The Congo has left the market in suspense about its next move when the export ban expires on June 22, 2018. Sources told the media in February that the government might extend the suspension, and also consider export quotas.

Sources who requested anonymity due to the sensitive nature of the issue said that Ives had said China's inventory of pipelines was running low and Congo should allow its miners to export cobalt freely.

Ives said that Congo's restrictions of cobalt exports could accelerate automakers' shift to lithium iron phosphate batteries (LFP), which do not require cobalt.

BYD and other Chinese electric vehicle manufacturers have already adopted LFP battery technology, which is also used in utility-scale energy storage.

Two sources claim that Congolese officials who were present at the event perceived Ives' mention of LFPs as an act of threat. One source said that the remarks reinforced officials' fears that China was trying to lower cobalt prices to build strategic stockpiles.

Officials from the Congo, including Pakabomba did not reply to phone calls or emails asking for comments.

CMOC's spokesperson Vincent Zhou refused to comment on Ives remarks or questions about Congo's fears of stockpiling but stated that the company is in favor of a "healthy marketplace environment".

According to LSEG, Chinese electric vehicle batteries maker CATL has a 30% stake at CMOC.

CMOC is expecting to produce between 100,000 and 112,000 metric tons of Cobalt in 2019, which is roughly twice the amount produced in 2023. This will be due to its increased activity at its Tenke Fungurume copper and cobalt mining operations in Congo.

GLENCORE BACKS EXPORT CURBS

Three sources reported that traders from Glencore, another major cobalt miner in Singapore, stated the market needed a stable price to lift the export ban and producers like Congo and Indonesia had to manage the oversupply.

Glencore has declined to comment.

Sources said that the Glencore traders in Singapore stated the company would accept an quota system if the Congo government chose to implement one.

Shirley Wang, General Manager of Shanghai Metals Market at the Singapore Conference, stated that Chinese smelters had built up stocks to last for between two weeks and six month.

One source said that Congo is evaluating the effect of the ban, and considering proposals by mining companies and other players in the market. She added that the negative impact of a halted export was the loss of tax revenue for the government.

Benchmark Mineral Intelligence stated in a press release that the most likely scenario is either an extension of this ban, followed by an introduction of export quotas or a transition directly to export quotas starting late June.

Both scenarios will likely support pricing. Reporting by Felix Njini from Johannesburg and Pratima Dasai from London; editing by Veronica Brown, Joe Bavier and Joe Bavier

(source: Reuters)