I'm going to start participating in these threads again. Enjoyed them very much in 2017.
Here's my summary on the Democratic Republic of Congo election and the subsequent investment we're seeing:
The election is over with Felix Tshisekedi declared the president again today after an appeal from fellow presidential candidate Martin Fayulu failed. So the opposition finally beat Kabila. Or did they? Was a deal struck? Currently we don't know, however I suspect as much with the overwhelming evidence suggesting Fayulu won in a landslide.
So, this looks bad right? Surprisingly no, and so far there have been few deaths and protesting has been relatively peaceful. It's almost like everyone has resigned themselves to the fact that this is a very big step in the right direction; a peaceful election where Kabila has or at least appears to have been defeated. I'm told that this result is probably a better result for business as a move to Fayulu may have been disruptive for a period of time.
China and the US have already responded since the peaceful transfer of power with China Moly announcing on Friday night they're acquiring 24% of the Tenke Fungurume mine for $1.6 BILLION dollars (AU)! They now own 80% of the copper/cobalt mine. This is significant for a number of reasons;
- a big investment in DRC. - a big investment in copper (currently out of favour price wise) - a big investment in cobalt (oversupply has been the narrative) - China's tick of approval
Also America's Ford and IBM have announced they want to source their cobalt from the DRC using blockchain to make sure it's humanely mined. The project is kicking off with 4 parties including South Korea's LG Chem and China's Huayou Cobalt.
The other big news is Erik Prince, founder of US private security firm Blackwater, and adviser to Donald Trump has announced a $500m battery fund targeting the DRC. The fund aims to bring deposits into production and for sale to larger mining companies. Prince’s sister Elisabeth Dee DeVos also happens to be Trump's education secretary.
So in ten days since the election result three US entities are talking DRC investment when they've avoided it like the plague in the past, and one massive investment from China. The new president also made the comment on his campaign trail that he'd consider reducing the mining tax. I wouldn't bet on that but overall very positive signs.
I'll touch on ASX DRC exposure in a future post. I'm invested in two significant projects, a shell looking for acquisition in the DRC and also monitoring a shell that's smoking big time right now.
(20min delay)
