Sources say that Congo copper and cobalt miners have reduced their chemical usage as the Iran war has disrupted supplies.

Sources with knowledge of the situation say that some key leaching chemicals have been withdrawn or cancelled by suppliers in Congo this month. This has forced'miners' to reduce their usage and look at reducing output as Middle East-related supply disruptions intensify.

The Democratic Republic of Congo, Africa's biggest copper supplier and world's leading cobalt producer, is a major player in the global supply chain for electric cars and clean energy transition.

The country's copper and cobalt mines rely heavily on sulfuric acids and sulfur-based chemicals, such as sodium Metabisulfite. However, supplies have been affected by the shipping turbulence linked to the Iran War.

Some miners have already felt the impact. One 2,000-metric ton SMBS order has been cancelled 'outright', and another 1,800-ton shipment has been withdrawn in April, after contracts were signed. A supply-chain source, who spoke on condition of anonymity, said that this was due to the commercial sensitivity involved with contracts.

Isabel Ramirez, a consultant in the mining chemicals supply chain and source, said that miners were cutting back on chemical consumption and considering reducing cobalt output. Another option is to produce cobalt that does not meet specifications.

Sources declined to identify the companies, but a source referred to the three largest operators in DRC – China's CMOC, Glencore, and Eurasian Resources Group.

Glencore refused to comment. CMOC, Eurasian Resources Group, and Congo's Mines Minister did not respond immediately to requests for comment.

IMPROVED SUPPLY VERIFICATION

The?supply chain source's statement said that buyers, with the uncertainty increasing, are placing more orders, tightening up supply verification protocols and sending representatives to warehouses in order to verify physical inventories and ownership documentation.

The source added, "Now they want you to prove that you have the stock."

The Congo's long-term?cobalt suspension and introduction of quotas has already impacted smelters worldwide. The government announced this month that it would allow companies to ship fourth-quarter delayed quotas before April 30, and first-quarter volume by the end of June.

Peter Harrisson, a consultant at CRU, says that the cost of sulfuric acid and SMBS, which are shipped through Tanzania's Dar es Salaam Port, has almost doubled in price since the start of war.

Ramirez stated that the rerouting of ships and limited availability of?freight have made things worse.

She said, "What used take three months is now taking four or six months." There is an increased risk of shortages. Reporting by Maxwell Akalaare Adombila, Olivia Kumwenda Mtambo and Mark Potter; Editing by Veronica Brown & Mark Potter

(source: Reuters)