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PARIS (Reuters) – French miner Eramet, whose mines in Gabon make it the world’s largest producer of high-grade manganese ore for steelmaking, suspended all operations in the country on Wednesday during an ongoing coup, sending its shares sharply lower.
A group of senior Gabonese military officers appeared on television in early Wednesday and said they had taken power after the state election body announced President Ali Bongo had won a third term.
“In view of the events under way in Gabon and as a precautionary measure, the group has activated procedures to ensure the security of its staff and the integrity of its operations,” a spokesperson for Eramet, Gabon’s largest private employer, told Reuters.
Eramet shares were down 17% at 63.25 euros by 1500 GMT after falling to 59.75 euros, their lowest in more than a year.
Eramet’s manganese operations, led by its Comilog unit operating the Moanda mines in Gabon, were the main contributor to the company’s profits last year.
The Gabonese government holds a 29% stake in Comilog.
The spokesperson said operations at Comilog and its train transportation unit Setrag had been suspended.
Manganese is the fourth most widely used metal in the world, after iron, aluminium and copper. Steel is the main market for its use, accounting for 90% of manganese consumption.
Eramet has manganese alloy processing plants in France, Gabon, Norway and the United States.
Morgan Stanley estimated that Gabon produces 8.5 million tonnes of manganese ore – 14% of global supplies – of which 7.5 million tonnes are from Eramet and 1 million from unlisted players.
Eramet’s spokesperson said the company was “monitoring in real time how the situation evolves”.
Nicolas Montel, analyst with BNP Paribas (OTC:BNPQY)’s asset management subsidiary Portzamparc, said a prolonged suspension would be felt on the market, although the group was unlikely to pull out of Gabon altogether where costs are among the lowest in the world.
In terms of company profits, he added that the impact of the suspension of operations would be partly compensated if it fueled any rise in the price of manganese, which is not traded on an exchange but is compiled by price rating agencies.
