Congo's Copper Concentrate Ban Sends Prices Soaring
The Democratic Republic of Congo's decision to ban copper concentrate exports has sent prices soaring to a six-month high. The three-month copper contract on the London Metal Exchange rose to $14,369.50 per metric ton, while spot prices hit a record $14,453.60 per ton.
Congo's authorities have been seeking to process domestically the portion of raw material that still leaves the country in concentrate form. However, previous bans introduced in 2013 and 2019 failed to deliver expected results due to insufficient large-scale smelting capacity. Exemptions allowed companies to continue exporting concentrate.
Investments by Chinese state-owned mining company CNMC and Yunnan Copper led to the modern Lualaba plant beginning operation in 2020, with an annual capacity of 400,000 tons of concentrate. This still falls short of processing all raw material mined in Congo, but signs of a gradual shift toward domestic processing are visible in trade statistics.
The current ban provides for 'strategic' exemptions if domestic capacity proves insufficient. Analysts at Goldman Sachs suggest the ban will not have a significant impact on the global copper market balance, but adds to tensions in the raw materials market.