Gabon coup complicates country’s critical mineral ambitions

The recent coup in Gabon highlights a central challenge facing mineral-rich African countries: providing the policy and political stability necessary to develop processing facilities that turn raw metal ores into refined, usable products, which would allow these countries to create good manufacturing jobs and expand economic opportunities in the service sector.

Gabon, a former French colony, is best known for its oil exports and on-again, off-again membership in the Organization of Petroleum Exporting Countries (OPEC). But it is also the world’s second largest producer of manganese. Manganese is an important input to iron and steel but also production of electric vehicle (EV) batteries, with some calling it “the key” to lowering consumer costs and driving widespread EV adoption. Manganese is on the critical minerals/resources lists of the United States, European Union, and South Korea. As recently as 2021, Gabon accounted for 65 percent of US manganese ore imports.

Mining and mineral processing are important to Gabon’s economic future, especially as demand for its oil exports declines. (Exports are already down from their peaks in the late 1990s.) Like other oil exporters, Gabon has failed to diversify away from oil exports, but its oil wealth means that its GDP per capita (in purchasing power parity [PPP] terms) is higher than South Africa or Egypt, making it ineligible for the European Union’s Generalized Scheme of Preferences or any other preferential market access provisions.

Gabon’s oil wealth has not created broad prosperity, and allegations of corruption have surrounded the long-ruling Bongo family, which had been in power since 1967. Its infant mortality is more than twice that of Bangladesh despite being over twice as wealthy in per capita terms. Ousted president Ali Bongo Ondimba had announced in 2016 a plan to end Gabon’s dependence on raw material exports by requiring some domestic processing or refining—an increasingly common approach used by raw materials exporters seeking greater returns on their mineral wealth.

In theory, Gabon has resources to move up global value chains by expanding domestic processing capacity and exporting from its developed ports and domestic rail infrastructure. It has some of the highest hydropower potential in the world to provide needed energy for processing. It has favorable endowments of mineral and energy resources and is investing in schools and training necessary to fuel mineral-led growth. Gabon opened a school of mining and metallurgy in 2018.

Until recently, it had the most important ingredient of all: stable, albeit highly authoritarian, domestic politics. Miners and oil drillers have to locate production facilities where the ore or hydrocarbons are irrespective of politics. As a result, extractive industries often work in areas of weak governance and political instability. Corruption may be lamented (or tacitly approved of and benefited from by transnational firms), but it can and is factored into the cost of doing business.

Downstream capacity is very different. Bulk shipping allows mineral refineries to be located thousands of miles from mine sites, in places with more favorable energy supplies; more tolerance for, or ability to mitigate, environmental impacts; and greater policy and political stability. It’s how China has been able to become the world’s foundry despite being import-dependent for many of the minerals for which it has world market-dominating shares of production.

The Gabon coup is the eighth in West and Central Africa in the past three years. Following coups in Burkina Faso, Chad, Guinea, Mali, Niger, and Sudan, the Washington Post described the Gabon coup as the latest forming a “belt” of instability. But recent events in Gabon stand out. Gabon is hundreds of miles south of the Sahel, the zone of transition between the Sahara Desert and vast savannahs where so many recent coups have occurred. Governance dynamics in the Sahel are complicated by the region’s vast geography and the confluence of religions, cultures, and livelihood strategies (particularly pastoralism and farming) that have made consolidating rule a persistent challenge, with coup attempts and armed conflict widespread (see table). In recent years, governments across the Sahel have faced popular discontent over insecurity stemming from counterinsurgency campaigns—carried out in cooperation with US and French armed forces—against Islamist militias.

But not in Gabon. Gabon is a small country—a landmass slightly larger than the United Kingdom, a population roughly that of Houston, Texas—whose oil exports had made its politics exceptionally stable by regional standards. Until recent events, Gabon had been ruled by the Bongo family for over five decades, coming to power when Lyndon Johnson was US president. Gabon has experienced no armed conflict since the end of the Cold War and just one failed coup attempt in 2019.

That has changed. The military junta now in power in Libreville has yet to announce plans regarding its vast manganese resources. But it may find itself in a similar position to bauxite-rich Guinea, where a 2021 coup has created policy uncertainty at a time when that country’s new military leadership is attempting to force downstream development, causing foreign direct investment (FDI) to fall in the aftermath. Coups—both realized and attempted—tend to depress FDI to the region, though the effect may be offset in the aggregate by Gabon’s significant oil and mineral wealth, which tends to attract FDI. But Gabon’s FDI flows had already been declining since 2020, a trajectory unlikely to be reversed given the current situation. Gabon’s dollar-denominated bonds (2025 maturity) fell 10 percent, as did Gabon’s innovative “blue” bonds, a debt-for-nature swap designed to help finance Gabon’s stewardship of its marine resources.

The wave of West African coups affecting critical mineral exporters (Guinea, Niger, and now Gabon) comes at a time when Western governments are emphasizing good governance, environmental protection, and labor standards in their shared approach to building critical mineral supply chains under the Minerals Security Partnership, and Beijing recently elevated the Chinese-Gabonese relationship to a comprehensive strategic partnership. The coup could thus scare off good governance-minded Western firms and increase dependence on China.

But the coup may bring a change in Gabonese-Chinese relations. Western firms eager to invest in Gabon’s manganese have been discouraged by the tight relations forged between China and Gabon during the Bongo family’s tenure, but Bongo family ties with China masked growing popular opposition to Chinese influence. Between 2014 and 2020, Gabon had the most precipitous drop among 16 African countries polled in the share of its population viewing China as a positive influence. It is too early to tell whether General Brice Clotaire Oligui Nguema, who led the coup, will pursue a more balanced approach to Gabon’s trade and investment ties with major economies.

General Nguema has promised to hand power back to civilians in new elections. But the damage to Gabon’s reputation as a bastion of stable rule in West Africa will be hard to overcome. And more than its mineral endowments or abundant renewable energy potential, political stability will ultimately be necessary if Gabon wishes to capture a greater share of the benefits from global energy transitions.