Investing in Election Season: The Polls to Watch in 2019 — Part 1

The general population can’t get away from it and neither can investors: somewhere on planet Earth, it’s election season, and some of the polls in recent memory have turned up some memorable results.

As everyone knows (and who could forget?) 2016 resulted in Brexit, Trump and Duterte, 2018 saw China’s Xi Jinping cement his hold on power through the abolition of term limits, and Jair Bolsonaro swept aside leftist rule in Brazil.

It’s February, and 2019 is set to be another year of elections to watch, with important mining jurisdictions going to the polls in the next few months — and plenty of news from other countries grappling with electoral results in the recent past coming to fruition.

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Here, the Investing News Network (INN) takes a look at the calendar and what elections there are on the horizon in the near future; from Nigeria this weekend to Indonesia and everywhere else with a mine and investors with money to invest.

Nigeria — General Election (February 23)

The most populous nation in Africa, Nigeria was meant to go to the polls on February 16, but the vote was delayed at the last minute with the national electoral commission blaming sabotage and logistics for its decision to shift the election back a week.

Incumbent president and former major general Muhammadu Buhari is running for re-election after winning the 2015 general election, though he served as Nigeria’s head of state in the 80s after taking power in a military coup.

Buhari represents the centre-left All Progressives Congress (APC) and is being challenged by the centre-right Peoples Democratic Party (PDP) candidate Atiku Abubakar, who served as vice president of Nigeria from 1999 to 2007.

Both the APC and PDP are blaming each other for the postponement of the election.

An oil-producing behemoth, Nigeria is the largest oil-producer in Africa, with a maximum crude production capacity of 2.5 million barrels per day.

Nigeria’s resources industry has been a hot topic in conflicts there in the past — the short-lived secessionist Republic of Biafra controlled the oil-rich Niger Delta for almost three years during the Nigerian Civil War in the 60s.

Today, the Delta remains at the forefront of Nigerian politics — this week Nigeria slapped oil companies with billions in back taxes.

Social issues are also a major issue for the industry and communities, with pollution resulting from extraction a flashpoint for conflict. Major oil-producer Shell (AMS:RDSA) has been accused of negligence in the recent past, and secessionist groups continue to claim they are being exploited by foreign corporations.

Ukraine — Presidential Election (March 31)

In Ukraine, incumbent centre-right president and anti-Russian (plus pro-EU) leader Petro Poroshenko is running again following his single-round victory in 2014, when he secured 54.7 percent of the vote against his closest challenge Yulia Tymoshenko — leader of the centre-right Fatherland party and former political prisoner during the tenure of pro-Russian president Viktor Yanukovych.

Tymoshenko will be running again in 2019, though polling has shown that actor and screenwriter Volodymyr Zelensky of the populist ‘Servant of the People’ political party is either matching or beating Poroshenko in popularity.

The war, which shaped the political landscape in Ukraine in 2014, grinds on today, with the War in the Donbass dragging into its sixth year and the annexed Crimean Peninsula remaining firmly under Russian control.

Ukrainian-Russian relations remain at a low, with the border between the two former allied Soviet nations closed. Embracing the European Union remains a major campaign issue — though frontrunner parties are united on this issue. In a sign Ukraine is not warming up to its northern neighbour, all polling stations for Ukrainian nationals in Russia were closed ahead of the election.

While the conflict continues, miners operating in Ukraine appear unfazed, with one iron ore executive telling INN that if Russia was to invade Ukraine and create more uncertainty and risk to mining in the country, it would have done it five years ago when the war started.

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Indonesia — General Election (April 17)

The world’s largest muslim nation goes to the polls in April, with both the executive and legislative branches up for election.

At the top level, it’s a rematch. President Joko Widodo, who first won office in 2014 is running against 2014 challenger Prabawo Subianto again.

Widodo, who is representing the centre-left Indonesian Democratic Party of Struggle (PDI-P), is also backed by the conservative Golkar party and a collection of moderate and islamist parties.

Subianto is heading the ticket of the right-wing populist Gerindra party — a splinter party of Golkar. He is backed by a coalition of centre-right and islamic-based parties.

Indonesia has seen mining at the forefront of nationalist sentiment, with the Widodo administration taking steps to tighten Jakarta’s grip on mineral resources there.

The most notable example is the nationalisation of the Grasberg copper mine in Papua province, which is now majority-owned by the Indonesian government, and operated by former owner Freeport McMoRan (NYSE:FCX) after lengthy negotiations.

For companies operating there, eyes will be on Chinese company Tsingshan and its plans for an HPAL (high pressure leach plant) to process laterite nickel ore into battery-grade nickel. Indonesia is the world’s top nickel producer.

India — General Election (April – May)

In the world’s largest democracy, voters will pass judgement on the government of Prime Minister Narendra Modi and his right-wing Bharatiya Janata Party (BJP), which swept aside the centre-left Indian National Congress (INC) party in 2014.

In 2019, the INC is led by Rahul Gandhi of the prominent Nehru-Gandhi family.

Polling since 2014 has shown a slide in BJP popularity over time, meaning it has a fight on its hands – though the INC has little to write home about, with a hung parliament the most likely outcome according to recent polls.

Outside observers have taken note of the BJPs sectarian bent, with Modi accused of ‘doubling down’ on Hindu nationalism in the religiously diverse country, though he has been hailing economic success abroad despite claims to the contrary.

While mining in India is a relatively small contributor to the national GDP, as the world’s second-largest copper consumer and second in line for almost every other consumed commodity behind China, this is an election to watch as economic growth in the industrial sector and development of the national economy can have a marked effect on demand.

Upstream resources issues have made news in the last year, as diversified mining giant Vedanta (NSE:VEDL) grapples with its public image in the south of India over its Sterlite copper smelter and pollution. Plans to double capacity at its giant Sterlite copper smelter in Thoothukudi were kiboshed by protests which saw the plant shut completely, though the company has been making inroads to re-opening the facility.

What’s next?

Looking ahead, INN will take a look at major elections coming up in the following months; Australia, South Africa and the Philippines will all go to the polls in May, which INN will cover in Part 2 of Investing in Election Season, while much later in the year Canada, Argentina, Bolivia, Namibia and Poland will vote on their leadership — to be covered in Part 3.

INN will also look into the issues facing the resources industry in each nation and their economies at large when the respective polling days roll around.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

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