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Madagascar takes to mining with wary eye on risks

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Madagascar takes to mining with wary eye on risks

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Target Madagascar travelled to Fort Dauphin in south-east Madagascar where for the last seven years a giant international mining company has worked a 2,800 hectare site of mineral sands. Total cost of the investment? Over seven hundred million million euros.

“We produce ilmenite here, a titanium oxide mineral which is used to make white pigments used in paint and papers, for example, and titanium metal used in aeronautics,” says Rio Tinto geologist Jean-Pascal Valiarimanana.

This one factory can produce 300,000 tonnes of ilmenite annually, but the setting up of the mine, in a three-way partnership between company, state and the Fort Dauphin region has also completely modified the local economy.

“Public security has improved, along with education, health and professional training. Small and medium-sized companies have been promoted to service and maintain the project and workforce and maximise local participation in the development,” says the President of mine operator QMM, Fanja Rakotomalala.

Three hundred and fifty new companies have sprung up in the region, and the mine itself employs 1,400 people. A new road and brand new port are open, with the latter able to take cruise ships.

“This project takes a unique approach to starting up a mine. The scale of social investment is big; right at the heart of the concession is 230 hectares, nearly 10% of the land set aside as protected forest with a nursery to grow trees to progressively restore the entire site as it is mined,” says euronews’ Serge Rombi.

But this environmental commitment is essential when doing business in Madagascar, where laws are strict and internationally monitored. Mining has been identified as a key sector for Madagascar’s future development, and the success of Fort Dauphin has led to another mega-project to dig for nickel and cobalt with ten times the investment.

“We have bauxite reserves of 100 million tonnes, and 600 million tonnes of iron in the ground. These are all confirmed figures,” says Mines and Petroleum Minister Ying Vah Zafilahy.

Other potential riches include gold, precious stones and uranium, but the business climate still needs improvement.

“We are competing with several African countries, from Asia and elsewhere, so we have to have a competitive environment that attracts serious investors who are with us to work long-term,” says Fanja Rakotomalala.

So everything is being done to make this feasible. Soon new laws will be in place with a new mining code the government hopes will strike the right fiscal and financial balance.

“We must be quick without being hasty. We need all points of view for a mining code that not only contributes towards national development but is fit for purpose for as long as possible,” says Ying Vah Zafilahy.

The three golden rules are, attract investors, make investments pay off for Madagascar, and protect the environment. Everyone hopes it will be a winning formula.

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