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Glencore ships first cobalt shipment under Congo's newly implemented quota system

One government source and two sources in the trade familiar with the matter said that Glencore was the first miner who exported cobalt to the Democratic Republic of Congo under the new quotas. They sent a "small" initial shipment as a test to the system.

The government source confirmed that the Congo has cleared Glencore's shipment pending payment a 10% royalty. This marks the beginning of exports following a long-term ban which pushed cobalt prices sky high and strained the availability of metals needed for electric cars.

Analysts estimate that the central African nation's production will be around 280.000 metric tons this year. This country accounts for over 70% of global supplies. The system was launched on 16 October and has a quota for the fourth quarter of 18,125 tons. It will cap exports to 96,600 tonnes per year from 2026.

Two separate sources in the trade said that traders originally expected to see shipments of cobalt to smelters as early as January, after Congo implemented its quota system. However, they have now decided it will be longer. Two separate sources said that the first full-sized shipment of Congo's cobalt is expected in April.

CHINA'S GLENCORE AND CMOC RECEIVE THE LARGEST ALLOCATIONS

The world's largest cobalt producers, China's CMOC, and Glencore received the largest quota allocations. CMOC has a quota of 6,650 tons for the fourth quarter, while Glencore is allocated 3,925 tons.

The regulator of Congo, ARECOMS, retains 10%?for strategic reserve.

The government source stated that CMOC Tenke Fungurume mining has also begun the exporting process.

Glencore declined comment. CMOC didn't immediately respond to a request for comment. Neither did ARECOMS or Congo's Mines Ministry.

"We authorized the first shipment of Glencore to be released as a trial process. The procedure to determine quality and make a final decision about the amount of exports is still in progress. The 10% royalty is paid after the determination of quality.

The source said that "once someone has done a first export it will be much easier to do the second." The sources were not allowed to be identified because they weren't authorised by the government to make public statements on this issue.

Although the Congo government has imposed penalties for non-compliance with its laws, exporters are still struggling to comply with unclear payment procedures and procedural requirements.

MINING LOBBY HAS SOUGHT URGENT TALKS IN ORDER TO TACKLE?DELAY

The country's mining industry had previously called for urgent discussions to clear up legal ambiguities. The new requirements, including a royalty prepayment of 10% within 48 hours and a certificate of compliance before any cargo is moved, could cause delays in exports as well as disrupt global supply chains.

Glencore, the company that operates the Mutanda, and Katanga mines, in the Congo, favored a quota system for exports, while CMOC sought a complete lifting of the embargo.

Exporters are required to notify authorities and prepare samples for testing, and then wait for laboratory tests to verify quality and volume before royalties can be calculated and paid.

A cargo cannot be moved without proof of payment.

The price of cobalt metal is around $24 per lb, or $52,900 per ton. This compares to a nine-year low of around $10 per lb when Congo announced the suspension cobalt exports in February. (Reporting and editing by Veronica Brown, Barbara Lewis and Ange Kasongo; reporting by Pratima Deai and Maxwell Akalaare Adombila)

(source: Reuters)