Congo's Copper Ban Sparks Panic in London Markets

The Democratic Republic of Congo recently banned exports of copper and cobalt concentrates, causing a panic in the markets. The London Metal Exchange (LME) three-month copper price soared to a six-month high of $14,369.50 per metric ton, while cash prices hit an all-time high of $14,453.60 per ton.

The CME cobalt price, however, remained unchanged despite Congo being the world's largest supplier of the metal. This is because Congo exports cobalt hydroxide, an intermediate product already subject to export quotas.

Congo has a long-standing ambition to move down the value chain and process its own copper concentrates. The country's rich deposits lend themselves well to electrowinning, allowing most operators to convert their mined material straight into metal. In fact, on-site refined copper production accounted for 82% of Congo's total output last year.

The latest export ban includes waivers for the giant Kamoa-Kakula mine complex, a joint venture between Ivanhoe Mines and Zijin Mining Group. The quid pro quo was Ivanhoe's commitment to build a new smelter, which has come online and is operating at 60% of design capacity.