Pietro Amico, General Representative, Eramet Gabon: Interview

Interview: Pietro Amico

What is the current state of the manganese industry in Gabon, and what are its prospects?

PIETRO AMICO: The sharp drop in commodity prices in 2015 has heavily impacted mining companies, including manganese producers. Operators were forced to adapt their production by restructuring their activities, resulting in a slowdown or even a partial shutdown of their operations.

In 2016 we have seen significant variations in prices. Our visibility is still near-sighted and the sustainable recovery of the industry is uncertain, given global over-production levels and weak demand from international markets. As the major manganese producer in Gabon, our production capacity is stable at 4m tonnes on a full year basis. Currently, we are focusing on productivity-enhancing approaches, though we are still studying next phases in production, especially those involving the neighbouring fields in Okouma, Moanda.

New mining laws have come into being in several emerging countries that share the same concerns towards the development of a local processing industry, and seek to ensure the rehabilitation of mining sites and social redistribution at a local level. Gabon’s new code does include such aspects, together with financial incentives. However, the application of these measures will need to be supported by precise and pragmatic implementing decrees.

What are the main challenges faced by extractive industries in the country?

AMICO: The quality and competitiveness of mining deposits remain paramount for the success of extractive activities. Yet we must not understate the importance of a reliable logistical network and an adequate management of its costs. In this regard, the Transgabonais rail line operated by SETRAG – a subsidiary of Eramet-Comilog – is a key element for mining companies in the country. In 2015 we successfully shortened travel times by around 20%, and the upcoming refurbishment of the railway will progressively decrease costs, allowing all operators to continue moving forward with their projects. The implementation of our ongoing preventive maintenance programme and the lowering of the number of unstable sections will significantly improve the reliability of the railway. Moreover, the forthcoming infrastructure upgrades will include new automatic management tools, considerably reducing the risk of errors and optimising the entire process. Similarly, port infrastructures must also evolve in regards to costs, capacity and reliability. Evidently, as pressure on mineral prices goes up, so does the need for the optimisation of logistical costs.

How are extractive industries contributing to the development of value creation in Gabon?

AMICO: Generally, processing facilities are established close to the end consumer, such as Europe, the US and Asia. If we seek to increase local value creation and, therefore, bring industrial facilities close to mining sites, such as the Moanda Metallurgical Complex, we must seek to ensure control over the cost price and count on competitive advantages domestically. There needs to be a well established energy infrastructure and a competitive logistical network, with capacities adapted to the needs of the industry, as well as a capable labour force. Indeed, local value creation requiring the use of new technologies implies the need for new competencies that may not exist locally. Technical training is a key success factor to industrial development and for the implementation of new industrial processes. One help in this regard is the launch of the new Mining and Metallurgy School of Moanda, (E3MG) – a partnership between the Gabonese state and Eramet-Comilog – which will deliver three specialised diplomas. The institution will seek to act as a training ground for the youth in the sub-region for mining and metallurgical industries.