IXM declares force majeure on cobalt contracts amid DRC export ban

IXM, a leading metals trading company owned by China Molybdenum, declared force majeure on its cobalt supply contracts on June 30, just over a week after the Democratic Republic of the Congo (DRC) announced an extension of its cobalt export ban.

"IXM today formally declared force majeure under its cobalt supply contracts due to the ongoing export ban imposed by the government of the Democratic Republic of Congo," the company said in a statement on LinkedIn.

The company said that the extension of the four-month cobalt export ban, enacted on Feb. 22 and extended on June 21 by another three months, "rendered it legally and practically impossible for IXM's suppliers, including Tenke Fungurume Mining and CMOC Kisanfu Mining, to export cobalt products from the DRC, directly impacting IXM's ability to fulfill its contractual obligations."

IXM added: "As the global cobalt supply chain faces heightened volatility, IXM remains committed to navigating this disruption responsibly and in compliance with all contractual and regulatory frameworks."

Commenting on the force majeure, a Europe-based trader said: "It was just a matter of time -- in a way, surprising it took them as long as it did."

"I would imagine this will have some psychological impact on the market," he added.

The DRC accounted for 73.6% of the global supply of cobalt in 2024, but its share is projected by S&P Global Market Intelligence to fall to 57% by 2035 on declining ore grades and rapid growth in Indonesia's high-pressure acid leach capacity.

Chinese refiners, which largely rely on cobalt hydroxide imports from the DRC, are expected to be adversely affected by the extension, and some are expected to turn to alternative sources of feed for cobalt, such as mixed hydroxide precipitate or black mass.

Platts assessed cobalt hydroxide at $11.70/lb CIF China on June 30, up 40 cents since the DRC announced the extension on June 21.

Platts is part of S&P Global Commodity Insights.