MMG Pauses Cobalt Production In Congo As Price Hits Historic Lows

Chinese state-owned miner MMG has mothballed production at its cobalt processing plant in the Democratic Republic of Congo just 15 months after starting the operation.

What Happened: According to Bloomberg, the Chinese miner cited "unfavorable cobalt market conditions" as the primary reason for halting its facility.

MMG invested up to $600 million in expanding its copper output and launching cobalt production at the site, which is in the Haut-Katanga province in southern DRC. Despite commissioning the plant in September 2023, the facility was placed on care and maintenance at the end of 2024.

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MMG is majority-owned by China Minmetals Corp.

Meanwhile, the miner reported a full-year 2024 production of just 1,600 tons of cobalt. That’s a fraction of its capacity. The company is also ramping up copper production, which it plans to increase by at least 40% this year.

Why It Matters: Cobalt production in the DRC, which accounts for about 75% of the global supply, has surged. Prices peaked at $82,300 per ton in early 2022 before plummeting over 72% to below $22,000 per ton. Rising production prompted organized crime to illegally mine and smuggle billions of dollars of this commodity, per ISS Africa.

The government repeatedly accused Apple of using these "blood minerals" in its supply chain, filing a legal case in Paris in December. However, per Reuters, the Paris prosecutor's office ruled that allegations of money laundering and deceptive business practices were “not sufficiently well-founded.” As a result, the case will not proceed, though Congo's lawyers have signaled their intent to challenge the decision.

Cobalt is essential in producing lithium-ion batteries, a key component of the EV transition. Still, its status as a byproduct of copper mining has largely influenced the market dynamic. This is creating an oversupply that has outpaced the demand.

Thus, at the end of February, the DRC government introduced a four-month cobalt export ban to stabilize the market. The Strategic Mineral Substances Market Regulation and Control Authority ban implemented the ban. It aims to prevent excessive stockpiling and control pricing fluctuations.

The effectiveness of this strategy is yet to be seen. The other side of the equation—the demand side—remains under pressure. Toshiba, for example, is fighting production costs and reliance on a complex supply chain. The company has developed a new cobalt-free lithium-ion battery targeting commercial production in 2028.

Price Watch: Global X Disruptive Materials ETF (NASDAQ:DMAT) is up 7.75% year-to-date.

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