Tariffs aren’t the only thing restricting global free trade right now: The Democratic Republic of the Congo, which mines a whole lot of cobalt, has banned the export of that metal since February, to push prices up. The country is now considering extending that ban.
Countries restricting mineral sales to influence prices on the global market has become something of a trend. And it’s going to affect the U.S. economy big time, since we don’t produce much in the way of critical minerals on our own.
You can find cobalt inside lots of technology: Your phone, electric car batteries, wind turbines.
“I would be exaggerating, but only slightly, if I said that airplanes would fall out of the sky without cobalt,” said Dinah McLeod, head of the Cobalt Institute, a trade group.
She said more than two-thirds of the world’s cobalt is mined in the Democratic Republic of the Congo.
“DRC really depends on the tax revenues that are associated with mining. The government took this decision to try to prop up the price of cobalt,” she said.
And prices have been propped.
“There’s been a significant jump,” said Thomas Kavanagh, editor of battery metals at the market intelligence firm Argus Media.
He said after the export ban started in February, the price of a key cobalt compound rose by more than 80%. And it could be just the start.
“There's actually been some talk of the DRC and Indonesia maybe teaming up and creating sort of an OPEC for minerals,” Kavanagh said.
There hasn’t yet been OPEC-level coordination among mineral producers. But governments these days are taking more control of their mining sectors.
Cullen Hendrix, a senior fellow at the Peterson Institute for International Economics, said that includes not just the DRC and Indonesia, the world’s top nickel producer, but also the top copper producer, Chile.
“They are seizing this moment where there’s such an emphasis on critical minerals to really re-evaluate their development models,” he said.
One goal is to ensure that the minerals mined in those countries get refined there, too. But Hendrix said the Trump administration wants to increase refining here in the U.S.
“That is now putting the United States in direct competition with the policy ambitions of many of these mineral rich countries that are also trying to move into the processing space,” he said.
Because when it comes to “critical minerals,” Hendrix said the real money isn’t in digging them out of the ground. It’s in turning them into something the world can use.
