China’s commanding position in the global critical minerals market—particularly in battery metals—has long appeared unassailable. In 2024, the country accounted for roughly 78 per cent of global refined cobalt output, cementing its role at the centre of the electric vehicle supply chain. Yet this strength masks a structural weakness: limited domestic mining capacity. Chinese refiners rely heavily on imports of intermediate cobalt products, primarily from the Democratic Republic of Congo (DRC), the world’s leading supplier. That dependency has now been exposed, as export restrictions from Congo disrupt flows and highlight China’s vulnerability to external supply shocks.
Export Curbs Trigger Supply Shock and Price Surge
Kinshasa’s decision to impose export controls—including a temporary suspension in early 2025 and a quota system introduced in October—has sharply curtailed shipments to China. By the fourth quarter, exports had nearly ground to a halt.
Under the new framework, Congo capped shipments at 18,125 tonnes for Q4 2025 and 96,600 tonnes for 2026, with a portion reserved for strategic allocation. Delays in implementation prolonged the disruption, with the first shipment under the revised rules only leaving in January. The market reaction has been swift. Refined cobalt prices have surged from around $10 per pound to $25, while cobalt hydroxide payables have jumped from roughly 55 per cent to 100 per cent of benchmark prices. Chinese buyers, facing acute shortages, have turned to domestic inventories, withdrawing significant volumes from exchange-held stocks, including reserves at the Wuxi Stainless Steel Exchange.
Limited Alternatives and Intensifying Global Competition
China has few viable alternatives to Congolese supply. While Indonesia is increasing cobalt output as a by-product of nickel mining, the additional volumes are insufficient to fully offset the shortfall.
Historically, Chinese companies have maintained a dominant position in Congo’s mining sector, securing access to both copper and cobalt. However, this influence is beginning to erode as Congo seeks to restructure its resource sector and capture greater value domestically.
At the same time, geopolitical competition is intensifying. Increased Western engagement—including potential US investment in mineral marketing ventures—is reshaping the landscape. Infrastructure developments, such as the Lobito rail corridor to Angola’s Atlantic coast, are also creating alternative export routes that challenge Chinese-backed logistics networks.
China’s Critical Minerals Achilles’ Heel
The cobalt disruption underscores a broader strategic issue: China’s dependence on foreign raw materials. Even in sectors where it leads globally, such as rare earth processing, it still relies on imports for key inputs. As demand for battery materials accelerates, this reliance is set to deepen, increasing exposure to geopolitical risk, resource nationalism, and supply chain disruptions.
The events in Congo illustrate a critical point: dominance in refining does not guarantee security of supply. China’s position at the heart of the global battery ecosystem remains strong, but its reliance on external sources represents a clear Achilles’ heel—one that could shape the future dynamics of the electric vehicle and energy transition industries.
