MMG has suspended operations at its Kinsevere cobalt processing plant in the DRC due to a price slump and an export ban. The company invested $600 million in this project, but the facility began care and maintenance shortly after its September 2023 opening. The DRC’s new regulations also establish a state monopoly on artisanal cobalt production and exports.
Chinese state-controlled mining enterprise MMG announced the suspension of its cobalt processing operations at the Kinsevere mine in the Democratic Republic of Congo (DRC) shortly after the plant’s inauguration, attributing this decision to a significant decline in cobalt prices and a recent export ban. The halt in operations began in December 2024, as market conditions for cobalt, a crucial element in electric vehicle batteries, remained unfavorable.
MMG, which is primarily owned by China Minmetals, had invested as much as $600 million to enhance copper output and establish cobalt production at the Kinsevere site. However, despite this substantial investment, the cobalt facility was put into maintenance just weeks after its commissioning in September 2023.
As a leading cobalt producer, the DRC has experienced increased output, notably from China’s CMOC Group, resulting in a surplus that has subsequently depressed market prices. To address this issue, the Congolese government imposed a four-month export ban intended to control oversupply and stabilize cobalt prices.
A representative from MMG confirmed that the company would pursue a “flexible production strategy,” allowing for a potential resumption of cobalt operations depending on price evaluations. Simultaneously, MMG plans to expand copper production by a minimum of 40% this year. Last year, MMG extracted 1,600 tonnes of cobalt and 380,000 tonnes of copper across its operations in Africa, Australia, and South America, with its most significant asset being the Las Bambas mine in Peru.
Furthermore, the DRC has implemented a state monopoly to regulate artisanal cobalt production and export. New regulations will allow the state-owned Entreprise Generale du Cobalt to maintain exclusive rights for exporting hand-dug cobalt, reinforcing the government’s grip on this critical sector.
In summary, MMG’s suspension of cobalt processing at its Kinsevere plant underscores the challenges facing the cobalt market, driven by surplus production and regulatory changes in the DRC. Despite significant investments, the unfavorable market environment has led to a strategic pivot towards copper production, highlighting the volatility of commodity markets and the impact of governmental policies. The DRC’s new regulations further centralize control over cobalt resources, reflecting a broader trend of regulatory scrutiny in resource-rich nations.
Original Source: www.mining-technology.com
