Concern about DRC poll result

The Democratic Republic of Congo’s (DRC’s) December 30 election looks set to have its first peaceful transition of power since gaining independence.

For many, Martin Fayulu presented a perfect balance of Anglophone and Francophone Africa – educated in the US and a Director-General at Exxon Mobil.

The man who won the election was Felix Tshisekedi, son of Étienne Tshisekedi, who founded the country’s first opposition party.

Then there was Emmanuel Ramazani, handpicked by former president Joseph Kabila to succeed him.

While Tshisekedi and Fayulu agreed to be part of an opposition coalition with one opposition candidate, Tshisekedi backed out after Fayulu was announced unity candidate. Neither emerged the overall winner and Fayulu has challenged the results.

But why should you care? Cobalt and smartphones.

The DRC accounts for twothirds of global production of cobalt – a primary ingredient in rechargeable batteries, used in smartphones.

Following the disputed poll, many political commentators have dispelled ideas of hasty policy reform in the DRC.

“It is anticipated that Tshisekedi will not change the mining code as DRC’s mining sector has largely been shielded from political turmoil,” says Signal Risk’s Ryan Cummings. “This could change based on the prevailing contestation of the election result.”

The Kabila government last year determined cobalt was a “strategic” substance and that it will attract nearly three times the royalty than before.

Will a new government review this steep royalty? “… any attempts at amending legislation will be difficult to pass through parliament,” reasons Cummings.

“Moreover, if it is indeed claimed that Tshisekedi’s victory was due to the brokering of an agreement between the Union for Democracy and Social Progress (Tshisekedi) and Common Front for Congo (Ramazani), it is more than likely that Tshisekedi will maintain the socio-political and economic framework employed by Kabila during his tenure.”

The latest 10% royalty rate will also apply to coltan, used to power electronic devices, and germanium, used in transistor manufacturing.

Some believe Fayulu would offer mining companies a laxer mining code.

“… Fayulu who has worked for a global oil company might be softer on the mining companies,” says Cobalt Congo’s Jean Pierre Chande.

Meanwhile, Glencore would be the most affected if the cobalt royalty rates aren’t amended as its Mutanda unit remains the world’s largest cobalt miner.