Glencore’s Cobalt Gambit: Navigating DRC’s New Export Reality

According to Engineering News, diversified mining company Glencore has outlined its strategy following the Democratic Republic of Congo’s lifting of the cobalt export ban and implementation of new export quotas. The DRC government has imposed export quotas totaling 87,000 tonnes per year for 2026 and 2027, with an 18,125-tonne quota for the remainder of 2025, plus a strategic government reserve of 9,600 tonnes annually. Glencore CEO Gary Nagle confirmed the company will prioritize DRC copper production over cobalt where feasible, storing above-quota cobalt production in-country while maintaining full-year 2025 production guidance. The announcement came alongside strong Q3 2025 results showing copper production up 36% quarter-on-quarter to 63,600 tonnes and cobalt production up 8% to 28,500 tonnes. This strategic shift comes as Glencore navigates new regulatory realities in the world’s primary cobalt-producing nation.

The Cobalt Conundrum: Supply Management Meets Battery Demand

The DRC’s shift from outright ban to managed quotas represents a sophisticated approach to resource nationalism that reflects the complex dynamics of the cobalt market. Unlike the previous blanket prohibition, this quota system allows the government to control supply while still enabling producers like Glencore to participate in global markets. The timing is particularly significant given cobalt’s critical role in the energy transition – approximately 70% of global cobalt supply goes into electric vehicle batteries and consumer electronics. What the source doesn’t mention is that this quota system creates a de facto price support mechanism, potentially stabilizing a market that has experienced significant volatility in recent years due to oversupply concerns and ethical sourcing issues.

Inventory Management and Production Prioritization

Glencore’s decision to prioritize copper production while managing cobalt within quota constraints reveals several strategic calculations. The company’s statement about having “sufficient cobalt inventory” suggests they’ve been preparing for this regulatory shift, possibly through strategic stockpiling during the export ban period. More importantly, the copper prioritization strategy makes economic sense given current market fundamentals. Copper markets are experiencing structural deficits with prices consistently strong, while cobalt has faced oversupply pressures. What’s particularly interesting is Glencore’s commitment to store excess cobalt in-country rather than reducing production – this indicates they’re betting on either quota increases or special dispensations in the future, essentially using the DRC as a strategic storage location.

DRC’s Evolving Resource Governance

The quota system represents the Democratic Republic of Congo‘s maturation in resource management strategy. Rather than simply banning exports, the government has implemented a more nuanced approach that maintains revenue streams while asserting greater control over strategic resources. The strategic reserve of 9,600 tonnes annually gives the government direct access to material that could be used for domestic industrial development or strategic partnerships. This approach mirrors strategies seen in other resource-rich nations seeking to move up the value chain rather than simply exporting raw materials. The risk for mining companies is that this could be the first step toward more aggressive localization requirements or value-added processing mandates within the DRC.

Broader Mining Sector Implications

Glencore’s response to the new regulatory environment will likely set precedents for other mining companies operating in the DRC. The strategy of maintaining production levels while storing excess inventory requires significant capital commitment and operational flexibility. Smaller producers without Glencore’s financial resources may struggle to implement similar approaches, potentially creating consolidation pressure in the DRC cobalt sector. Additionally, the quota system could accelerate the development of alternative cobalt sources outside the DRC, though the reality is that the country’s dominance in cobalt production – accounting for approximately 70% of global supply – means these quotas will influence global metal markets for the foreseeable future.

Market Adaptation and Long-term Strategy

Looking forward, Glencore’s approach suggests they’re playing a long game in the DRC. The decision to maintain cobalt production capacity while temporarily storing excess material indicates confidence that either quotas will expand or market conditions will improve. The company’s diversified portfolio provides crucial flexibility – they can absorb temporary cobalt market disruptions while benefiting from strong copper performance. However, the in-country storage strategy carries risks including potential degradation of material, security concerns, and the opportunity cost of tied-up capital. As battery manufacturers continue seeking cobalt supply chain stability, Glencore’s ability to navigate these complex regulatory waters while maintaining production consistency will be closely watched by the entire electric vehicle value chain.