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How will Gabon’s military coup impact the manganese supply chain?

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On Wednesday, August 30, Gabon’s military declared a coup d’état, following the results of the general elections held on 26 August that reinstated President Ali Bongo for a third term.

Gabon is the world’s second-largest producer and exporter of manganese ore and thus any impact on domestic manganese operations could have implications for the global supply chain. Last year, the country accounted for 17% of global mine supply and 15% of global exports.

Most output in the country is from Eramet where its subsidiary, Comilog, undertakes production, processing, and refining of manganese ore sourced from the Moanda mine near Franceville. The government of Gabon holds a 29% stake in Comilog, following the creation of the Société équatoriale des mines (SEM) in 2011.

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The Moanda mine is known for its manganese supergene deposit, characterized by a manganese content ranging from 40% to 50% Mn (a very high grade). Other operators in Gabon are Nouvelle Gabon Mining, which operates the Okondja mine and the Beniomi manganese mine and South Manganese which operates the M’Bembele mine.

Disruptions at Moanda would have the biggest impact on steel mills in China, India, and Norway – the primary export destinations for Gabon’s manganese products. In Norway, material is sent to three Eramet-owned smelters (Kvinesdal, Porsgrunn & Sauda) highlighting the considerable exposure of Eramet to this ongoing political situation.

Comilog is also the source of feedstock for Prince, owned by Vibrantz Technologies, one of only a small number of ex-China producers of battery-grade manganese sulphate (the others are in Japan). Prince operates the Tertre Plant in Belgium, producing manganese sulphate as well as oxides, dioxide, carbonate, chloride, and nitrate.

Following the coup attempt, Eramet took precautionary steps by announcing a temporary suspension of operations on August 30th. Freight activity has since restarted and mine operations resumed on the morning of August 31st, with the company closely monitoring the situation.

With the possibility that operations may continue unaffected, the impact on the manganese market may be modest, although some price reaction may be expected. Should the situation in the country destabilise, a large price reaction is likely.

There may be some longer-term impacts if the country’s stability is brought into question – and downstream players dependent on Gabonese feedstock will doubtless be monitoring the situation very closely. While most Gabonese ore is eventually consumed in steel applications, the small volumes destined for lithium-ion battery applications are vitally important as Western OEMs look to build out more local battery supply chains with strong ESG credentials with very few supply options available at present.

 

Source: project blue

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