South African exec. Gary Nagle-led Glencore halts some cobalt deliveries after Congo ban

Key Points

• Glencore declared force majeure on some cobalt deliveries after Congo suspended exports to ease a supply glut that had depressed global prices.
• Glencore shifted $30 billion in mining assets, including coal and copper, into its Australian unit, doubling its asset base and signaling deal readiness.
• Cobalt prices have risen 35% since the export freeze, though it’s unclear if Congo will extend the ban or introduce quotas post-June.

Glencore Plc, the Swiss commodity trading and mining giant led by South African executive Gary Nagle, has declared force majeure on certain cobalt shipments from the Democratic Republic of Congo, following months of export restrictions imposed by the Congolese government.

Congo is the world’s largest producer of cobalt, accounting for nearly 80 percent of global supply. The government announced a four-month export freeze back in February to help ease a supply glut that had driven prices down. Since then, the market has started to recover, with cobalt prices reaching levels last seen in 2023 when U.S. spot prices topped $30,000 per ton.

Customers still receiving some cobalt deliveries

Caught off guard by the sudden halt, Glencore responded by triggering force majeure on certain supply contracts, a clause typically reserved for events beyond a company’s control that make it impossible to meet contractual obligations. Cobalt, largely extracted as a byproduct of copper mining in Congo, is vital for both defense industries and high-performance batteries.

Despite the disruption, many Glencore customers are still receiving deliveries under existing agreements. The company mined 35,100 metric tons of cobalt at its Congolese operations last year, making it the world’s second-largest producer after China’s CMOC.

Since the ban took effect, cobalt prices have climbed about 35 percent. As of now, the U.S. spot price stands at $33,313.64 per metric ton, up from $31,534.71 last month and $27,997.07 a year ago. It’s still uncertain whether Congo will lift the export ban when it expires on June 22 or move to introduce export quotas instead.

Gary Nagle reshapes Glencore strategy

Founded in the 1970s as a trading house, Glencore has evolved into a global mining heavyweight with operations in 35 countries and a workforce of more than 150,000. Under Gary Nagle, Glencore has focused on growing its presence in energy and metals. Last year, Glencore reported a 6 percent rise in revenue to $230.94 billion, supported by solid performance across its metals and marketing businesses.

In a significant strategic shift, Glencore recently moved over $30 billion worth of global mining assets into its Australian arm, Glencore Investment Pty Ltd. The transfer, detailed in filings with Australian regulators, includes coal mines in Colombia, South Africa, and Canada; the Mara copper project in Argentina; and ferroalloy facilities near Johannesburg. The move has effectively doubled the company’s Australian asset base to more than $65 billion.

Glencore reshapes for future deals

This restructuring follows Glencore’s decision last year to shelve plans to spin off its coal operations and its ultimately unsuccessful attempt to merge with mining rival Rio Tinto. Analysts say the bundling of legacy assets, such as coal and some South African mines, into a single entity could make Glencore more appealing in future deal-making.

Separately, Glencore is investing R6 billion ($329 million) to modernize its Cape Town refinery, operated by its fuel retail subsidiary Astron Energy. The upgrade, expected to be completed by 2027, will align the facility with Euro 5 fuel standards as part of the company’s broader efforts to modernize and diversify its energy portfolio.