Indonesia to drive cobalt supply growth as market shifts beyond DRC dominance

By Dominikus

Indonesia is emerging as a key driver of global cobalt supply growth as the market undergoes a structural transformation away from its historical reliance on the Democratic Republic of Congo (DRC), according to analysis by Shanghai Metals Market (SMM) last week on its webinar.

SMM data indicates that global primary cobalt supply is expected to expand significantly over the coming years, rising from around 321,000 tonnes in 2024 to approximately 369,000 tonnes in 2026 and reaching about 464,000 tonnes by 2030.

A major portion of this growth is projected to come from Indonesia, where rapid expansion of nickel processing projects is generating increasing volumes of cobalt as a by-product. These developments are closely linked to the country’s broader downstream strategy in the electric vehicle battery supply chain.

SMM projections show Indonesia’s share of global cobalt supply increasing substantially, from around 12 percent in 2024 to approximately 30 percent by 2030. At the same time, the DRC’s share is expected to decline from about 73 percent to around 57 percent, reflecting a gradual diversification of global supply sources.

Importantly, Indonesia is expected to contribute the largest incremental increase in cobalt supply during this period. SMM estimates that the country will account for over 85,000 tonnes of additional cobalt output between 2024 and 2030, far exceeding incremental contributions from other regions.

This shift highlights the growing importance of nickel-cobalt resources, which are becoming a dominant source of cobalt supply compared with traditional copper-cobalt ores. As Indonesia continues to expand its high-pressure acid leaching (HPAL) and downstream nickel processing capacity, its role in the cobalt market is expected to strengthen further.

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Despite strong supply growth, SMM noted that the global cobalt market is likely to remain in oversupply in the near term. However, this surplus is not expected to translate into uniform market conditions.

Geopolitical risks and export restrictions in the DRC continue to pose significant challenges to global supply chains. SMM analysis suggests that export volumes from the DRC could be constrained by quota systems and shifting trade priorities, potentially affecting the availability of cobalt feedstock for downstream processors, particularly in China.

These dynamics are expected to create regional imbalances, where some markets experience tightness despite overall global oversupply. The coexistence of surplus supply and localized shortages is likely to contribute to continued price volatility.

Cobalt prices have already demonstrated sharp movements in response to policy changes, with significant increases recorded across various cobalt products following supply disruptions. The divergence in price trends and profitability across different cobalt products further reflects the complexity of the market.

For Indonesia, the outlook underscores its strategic position within the global battery materials ecosystem. The country’s expanding nickel industry not only supports its role as a leading nickel producer but also positions it as a major supplier of cobalt, reinforcing its importance in the broader energy transition.

As global supply chains continue to evolve, Indonesia’s ability to scale production and integrate downstream processing will be a key factor shaping the future balance of the cobalt market.

Editing by Reiner Simanjuntak