Argus Media Limited

08/31/2023 | News release | Distributed by Public on 08/31/2023 12:34

Eramet resumes Mn ore mining in Gabon: Update

In paragraph 2, adds confirmation from Eramet that it resumed mining operations at Comilog this morning.

French mining company Eramet has restarted its manganese ore mining operations and rail transport in Gabon after temporarily suspending both yesterday because of a military coup.

Eramet confirmed this afternoon that it resumed mining at its Comilog operations this morning.

The company restarted its subsidiary Setrag's rail transport activity in Gabon yesterday evening, according to a statement released at 18:30 CEST on 30 August. Passenger train movement will remain suspended until further notice, it added.

"The Group is continuing to monitor the situation in Gabon closely and will keep the markets informed. In total, production at the Moanda mine will have been halted for 24 hours and rail transport for 18 hours," it said.

High manganese ore reserves in Chinese port warehouses and on the water are likely to soften any immediate price reaction, but market participants expect that the recent downtrend in ore prices will now reverse, given the potential for supply disruption.

Gabon mined an estimated 4.6mn mt of manganese in 2022, making it the second-biggest producer globally, just behind South Africa, according to US Geological Survey (USGS) data.

Market participants said that there are still unanswered questions regarding how much manganese ore exports will be affected if the political unrest develops further.

The Argus weekly assessment for import prices of 44-46pc lumpy ore was flat at $4.65-4.75/dmtu cif China today, unchanged from the previous assessment, registering no increase from the temporary suspension at Comilog.

China's manganese flake market is unlikely to be affected because its required low-grade manganese ore is predominantly sourced domestically or from Ghana. There may be some indirect impact if units from Ghana, or other origins, are required to fill a supply-gap left by Gabon in the event of further supply disruption. Any resulting price increases are more likely to be seen directly in the ore market, or manganese alloys. However, Chinese ferro-manganese and silico-manganese prices were unchanged in today's assessment, as spot buying activity remained muted.

In Europe, some traders expect manganese alloy producers to raise offers in upcoming tenders for fourth-quarter purchases. But underlying demand in the steel industry is not sufficient to support a significant price increase unless there is a protracted disruption to manganese ore supplies from Gabon.

By Samuel Wood and Cristina Belda