Gabon faces challenges as the world's second-largest manganese producer due to a military coup, but China's excess supply of the metal needed for steel and emerging battery chemistries may buffer any immediate price spike.
Eramet SA's Moanda, the world's largest producing manganese mine, restarted operations Aug. 31 after a suspension Aug. 30 but did not restart rail transport and shipping activities.
"The price of Gabonese ore was already going up before the coup, and the Chinese port stocks were reducing, so depending on the duration of the disruption, the price may go up further, and stock will continue to be used up," said Andrew Zemek, special adviser to the CPM Group, a US-based commodity research firm. "It all depends on how things develop, how long it lasts, and what direction the junta will take."
Platts assessed 44% manganese ore at $4.25/dry metric ton unit CIF Tianjin on Aug. 31, up 5 cents from Aug. 25. Prices had been falling since March 10 because of healthy supplies at Chinese ports, according to S&P Global Commodity Insights.
Armed forces in Gabon staged a coup Aug. 30 after incumbent President Ali Bongo was declared the purported winner of the Aug. 26 election. "Strong popular support for the coup underlines the remote possibility that the ailing Bongo, placed under house arrest, will be restored to power," S&P Global Market Intelligence said in its latest country risk assessment.
High-grade supply
Gabon produced 8.7 million metric tons (MMt) of manganese in 2022, or 17.4% of global output, according to Market Intelligence data.
The Moanda mine produced 7.5 MMt of manganese in 2022, followed by South32 Ltd.'s Groote Eylandt in Australia with 5.6 MMt, according to Market Intelligence data.
Comilog, Eramet's local subsidiary, produces one-third of the world's high-grade manganese ore, according to ODDO BHF analyst Maxime Kogge.
Gabonese authorities "have every interest in guaranteeing the continuity of Eramet's operations given the weight of manganese in the economy (10% of exports)," Kogge said in an Aug. 30 note. "In the longer term, however, the question of preserving Eramet's interests in Gabon arises."
Nicolas Montel, a BNP Paribas analyst, does not expect the political developments to impact Comilog or Eramet's activities in the country.
"The effect of the one-day shutdown of manganese ore production is negligible on our estimates," Montel said Aug. 30 by email. "We also do not believe it will impact manganese ore price due to the fact that the production stoppage was very short."
Gabon also has iron ore, gold, potash, uranium and other resources.
Fortescue Metals Group Ltd. said during an Aug. 28 earnings call that its Belinga iron ore project in Gabon remains on track to deliver its first shipment by the end of 2023, but the miner has not issued any updates since the coup.
Armada Metals Ltd. said it is not undertaking active field work at its Nyanga nickel and copper project in Gabon and was in touch with personnel on the ground. Apollo Minerals Ltd. said its Kroussou zinc-lead project was unaffected.
The Platts 44% manganese ore price is an offering of S&P Global Commodity Insights. S&P Global Commodity Insights is a division of S&P Global Inc.
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