China has long been viewed as the powerhouse of critical minerals, particularly those used in batteries for electric vehicles. In 2024, it accounted for 78% of global refined cobalt output, according to the International Energy Agency. But China’s dominance masks a key vulnerability: it lacks substantial domestic cobalt mining capacity and relies heavily on imports of raw materials.
That dependency has been thrown into sharp relief by the Democratic Republic of Congo’s recent export restrictions. The DRC is the world’s largest source of cobalt intermediate products for Chinese processors. After suspending exports in February 2025 and introducing a quota system in October, shipments to China ground to a near halt in the fourth quarter of last year. Local prices have since surged amid fierce competition for limited supply.
Export Controls and Supply Disruption
Congo set export quotas at 18,125 metric tons for Q4 2025 and 96,600 tons for 2026, including a 10% strategic allocation. Delays in implementing the system caused exports to stop entirely at the end of last year. The first truck carrying cobalt under the new rules only left the country in January. While operators can roll over their Q4 2025 quotas, shipments typically take three months to reach China, leaving the country in a period of acute supply tightness.
The price of refined cobalt has more than doubled, from $10 per pound in early 2025 to $25, reflecting the impact of Congo’s export controls. The situation is even more acute for intermediate products like Congolese hydroxide, whose “payable” value has risen from around 55% of the metal price in February to 100%. Chinese buyers have increasingly tapped cobalt stocks held at the Wuxi Stainless Steel Exchange, withdrawing over 3,250 tons by the end of January, or 37% of the exchange’s inventory.
Limited Alternatives and Rising Competition
China faces few viable alternative suppliers to the Congo. Indonesia produces cobalt as a by-product of nickel mining, but even increased Indonesian output this year will not fully offset the shortfall. Historically, China has dominated the Congolese mining sector, sourcing both copper and cobalt for domestic smelters and refineries. That control is now eroding.
Congo’s export restrictions are part of a broader effort to restructure its mineral sector and capture more value from its resources. The United States has mediated a peace deal between Kinshasa and Rwanda, facilitating U.S. investment. The U.S. International Development Finance Corporation announced plans to take a stake in a new joint venture to market the government’s share of copper and cobalt, giving U.S. buyers first refusal rights. A new rail link to the Angolan port of Lobito provides a strategic corridor rivaling Chinese-backed infrastructure, intensifying competition for Congolese cobalt.
China’s Achilles’ Heel in Critical Minerals
Mining remains China’s weak spot in global critical mineral supply chains. Even in rare earths, where China is the largest miner, it depends on imports from Myanmar for heavy elements like dysprosium and terbium. As domestic demand grows, China’s reliance on third-party suppliers for raw materials will only increase, making it vulnerable to geopolitical shifts and export controls.
The cobalt squeeze in Congo illustrates this risk vividly. China’s position as a dominant processor does not insulate it from supply disruptions or rising global competition. As the world increasingly vies for critical minerals, China’s dependency on foreign sources exposes an Achilles’ heel that could shape the global battery and electric vehicle industries for years to come.
With information from a Reuters column.
