Europe’s Gabon-exposed stocks slide, French miner Eramet set to resume operations after military coup

French miner Eramet, ERMAF which on Wednesday suffered heavy stock market losses after it suspended operations in Gabon in response to an ongoing coup, said manganese mining in the country would resume on Thursday.

“In view of the information available this evening on today’s events in Gabon, the group has decided to immediately restart rail transport activity and to resume mining operations as of tomorrow morning,” it said in a statement.

Eramet’s Gabon mining activities make it the world’s largest producer of high-grade manganese ore for steelmaking. The halt sent shares in the company down by about 17% in Paris daily stock market trading.

“The group is continuing to monitor the situation in Gabon closely and will keep the markets informed,” Eramet said in a statement released at 1630 GMT.

Earlier on Wednesday, a group of senior Gabonese military officers appeared on television and said they had taken power after the state election body announced President Ali Bongo had won a third term.

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.

Manganese is the fourth most widely used metal in the world, after iron, aluminum and copper. Steel production uses 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.

Nicolas Montel, analyst with BNP Paribas’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 could be mitigated if it led to any rise in the price of manganese, which is not traded on an exchange but is assessed by price rating agencies.

Meanwhile, shares in European oil producers, miners and other companies with large exposures to Gabon plummeted on Wednesday after the military coup raised concerns over their operations in the resource-rich African country.

London-listed oil producer Tullow Oil fell as much as 12% in afternoon trading, while French energy companies TotalEnergies Gabon and Maurel et Prom and miner Eramet all dropped by more than 20% at one point.

“Shares are reacting to concerns over the backdrop in Gabon,” said Investec equity analyst Alex Smith in London.

Military officers in Gabon said they had seized power on Wednesday and put President Ali Bongo under house arrest, stepping in minutes after the state’s election body announced he had won a third term.

France, Gabon’s former colonial ruler which has troops stationed in the African nation, condemned the coup.

Eramet, the world’s No.1 producer of high-grade manganese ore thanks to its Moanda mine in Gabon, said it had suspended all operations in the country as a “precautionary measure.”

Timber company Woodbois also said production at its facilities in the Gabonese city of Mouila were suspended, sending its London-listed shares almost 16% lower.

However, Assala Energy, which current owner Carlyle has agreed to sell to Maurel, said its oil production in Gabon was unaffected.

Tullow Oil also told analysts its production was continuing as normal.

“Note Gabon production represents around 20% of group production. However, assets are based offshore and importantly oil revenue is dollar denominated,” said Investec’s Smith.

Gabon produces about 200,000 barrels a day (bpd) of crude oil, making it the second-smallest OPEC producer.

Oslo-listed Panoro Energy and BW Energy were down 5% and 7%, respectively, and U.S.-based Vaalco Energy fell 13.8%.

According maritime sources, at least 30 commercial ships dropped anchor on Wednesday around Gabon’s waters.