The cobalt market saw its biggest ever supply surge last year, driven by booming production of the crucial battery metal in the Democratic Republic of Congo (DRC) and Indonesia, according to specialist trading house Darton Commodities.

Mined cobalt supply grew by 23% to 187,060 tons in 2022, in a supply swell that wiped out a large deficit seen in 2021 and left the market in one of its largest ever surpluses at the end of the year, Darton said Monday in its annual cobalt report. The surge was driven by increases in the DRC — which accounts for about 75% of global supply — as well as Indonesia, an emerging powerhouse in the small but rapidly growing market.

The wave of supply coincided with a sharp slowdown in demand from the electronics sector, which vies with the electric-vehicle industry as the biggest consumer of the battery metal. While rising EV sales helped fuel a sharp rally in prices early in 2022, cobalt has since slumped more than 60% from a June peak.

Cobalt, a byproduct of copper and nickel mining, has caused frequent headaches for car-makers during prior bouts of under-supply, alongside persistent concerns about hazardous working conditions in the DRC’s informal mining sector. While large-scale industrial miners accounted for the bulk of last year’s increase in supply, output from so-called artisanal miners also rose sharply during the run-up in prices early on in the year, Darton said.

Global mine production grew 42% between 2020 and 2022 amid the easing of Covid-19 related supply chain constraints, ramp-ups at existing operations and the commissioning of several new mines, according to Darton. Last year Glencore was by far the world’s largest miner of the mineral, mainly from its two operations in Congo. Eurasian Resources Group and China’s CMOC Group, which also have large Congo operations, followed the Swiss company as the biggest producers.

In 2022, 44% of global mine supply was owned or controlled by companies from China, which also accounts for 78% of refined cobalt production, according to Darton estimates. Mine production is set to increase by about another third over the next two years, the UK-based trading house said.

The cobalt market is currently bracing for another potential near-term supply shock, with CMOC looking to resolve a dispute with its Congolese state-owned partner that would allow it to export a huge stockpile of semi-refined cobalt hydroxide from its Tenke Fungurume mine. While its exports were blocked in mid-July, CMOC has kept the mine running at close to full capacity, simply stockpiling the extra metal until it can resume shipments, Bloomberg reported last month.

“While the broader cobalt complex endured a massive correction during 2022 against a backdrop of sharp supply increases and numerous demand setbacks, green shoots are starting to show,” Darton Commodities said. “However, the standoff between CMOC and Gecamines in the dispute over royalty payments remains a wild-card, and has the potential to drastically shift the cobalt hydroxide market in one direction or the other.”