Cobalt rising global-price pushes Zambia with “Opportunity Window”

By Kelvin Chisanga – Zambian Social Economist 

The recent surge in cobalt prices, rising by about 130 percent from early 2025 levels to over US$56,200 per tonne, is clearly best understood as a supply-driven shock rather than a full structural shift in the global cobalt market.

The rally has been triggered mainly by policy and regulatory constraints from major producing countries, which have tightened supply in a market that is already highly concentrated.

When supply is administratively restricted, prices tend to react sharply and often overshoot in the short term.

From a fundamentals perspective, cobalt demand remains supported by the global energy transition, particularly in high-performance batteries, aerospace and defence applications.

However, demand growth is no longer as explosive as once projected, given the rapid shift toward cobalt-reduced and cobalt-free battery chemistries. This places natural limits on how long extreme price levels can be sustained.

For Zambia, the price increase is economically meaningful. Cobalt is produced largely as a by-product of copper mining, especially within the Copperbelt areas.

Higher cobalt prices therefore improve mine profitability, support employment and enhance investment viability in the broader copper sector.

At the macro level, Zambia benefits through stronger export earnings, increased foreign-exchange inflows, improved fiscal revenues and greater support for kwacha stability, as this can also see get further appreciation in the short-term.

Strategically, this price rally strengthens Zambia’s case for value addition and integration into regional critical-mineral supply chains. However, the gains should be treated as temporary window of opportunity.

The key policy challenge is now to convert short-term windfalls into long-term resilience by building fiscal buffers, maintaining investor confidence and accelerating economic diversification rather than anchoring expectations to volatile commodity prices.

Note:
Cobalt (Co) is a hard, silvery-gray, ferromagnetic metal essential for modern technology, famously used in lithium-ion batteries for electronics and EVs, high-strength alloys in aerospace, and powerful magnets, while its compounds have historically colored glass and ceramics blue. Crucial for human health as part of vitamin B12, it’s a transition metal found in minerals, often with copper and nickel, and named from the German ‘kobold’ (goblin) due to miners’ difficulties with its arsenic-bearing ores.
This video provides an overview of the properties and uses of cobalt: