M

adagascar brings to mind inviting beaches, unusual plant and animal species, and spices like vanilla and cloves, but mining is fast becoming an economic cornerstone in the island containing paradise and poverty.

THE ENORMOUS MINERAL wealth of Madagascar is being explored and exploited, while tourism continues a slow but steady rise.

Some 14 years ago, when the authoritarian socialist rule of Didier Ratsiraka was coming to an end, all the signs of a country in ruin were present: officious and inefficient processing at the airport; appalling roads; intermittent water and electricity supply; surly, poverty stricken people; very meagre goods and services; a handful of indifferent but expensive hotels; endemic corruption. Political instability aside, there is a new vitality on Madagascar. Now there is a highly functional road and traffic system, a high level of construction activity and extensive stretches of well-tended rice fields, ever a Madagascan hallmark. A lot has changed in recent years, starting with previous pres Marc Ravalomanana adopting business friendly economic policies. The country embarked on a series of measures to privatise the many parastatals set up under the previous socialist regime and welcomed foreign and local private investment with open arms. The result is eight years of healthy, steady growth.

Exploration and operation

THERE IS A NEW vitality on Madagascar, backed by a highly functional road and traffic system, and a high level of construction activity.

PAGE 16 APRIL 2010 MINER’S CHOICE

However, dependence on agriculture and textiles is about to change for the better, and dramatically so. The enormous mineral wealth of Madagascar is being explored and exploited. Two major mineral extraction projects are close to operation, and many more are in exploration.

The most advanced project is QIT Madagascar Minerals (QMM), Rio Tinto's heavy sands project in the south of the island. Rio Tinto owns 80% of QMM through its subsidiary QIT, while the Madagascan government owns the other 20%. The $850 million project comprises of a mineral sands extraction plant, which extracts valuable minerals from sand and alluvial deposits, and expansion of the port of Taolagnaro in the Fort Dauphin region, with surrounding infrastructure. Despite a slow down during 2009, production of ilmenite (titanium dioxide) should reach full capacity this year.

Nickel ambitions

The most ambitious venture is Ambatovy nickel project, at $4 billion, under construction some 80km east of Antananarivo. It is expected to come into operation in 2011.

Ambatovy Nickel will consist of an open pit operation and an on-site ore preparation plant. Sherritt International of Canada holds 45%, with Japanese Sumitomo Corporation and Korean Korea Resources Corporation (Kores) each holding 27.5%. SNC Lavalin of Canada is the EPCM project contractor.

During construction, the project employs an average of 3000 workers. In operation, Ambatovy nickel will employ some 1400 permanent workers. The operation will have an estimated production of 60 000 tonnes of nickel, 5600 tonnes of cobalt, and 186 000 tonnes of ammonium sulphate per year.

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