AMN - Madagascar’s mining potential emerges – comment by Yolanda Torrisi

Madagascar is not a name that immediately springs to mind when considering mining in Africa but that is changing with a couple of companies operating there and others looking to exploit its plentiful mineral resources. A stable, and apparently more supportive, government is also playing its part in the rise of the island country.

Tanzania has dominated the mining scene in East Africa in recent years but in the past 12 months government measures have put a dampener on its status and deterred existing and potential investors. Mozambique appears the natural successor to Tanzania, but Madagascar believes it can also stake a claim as an attractive destination for mining investment.

After a period of political turmoil, things have settled down since the current President Hery Rajaonarimampianina came to power in January 2014 and the government is seeking to enhance regulations to ease licensing and permitting, improve infrastructure and make Madagasgar more attractive for investors.

Already operating are Sherritt’s Ambartovy nickel/cobalt mine and Rio Tinto’s mineral sands mine near Fort-Dauphin at the south-east tip of Madagascar. QIT Madagascar Minerals, which is 80% owned by Rio Tinto and 20% owned by the Government, is extracting ilmenite and zircon from heavy mineral sands over an area of about 6000 hectares along the coast.

Infrastructure is poor in many parts of the country and non-existent in others. The country’s semi-arid southwest corner, where the many of the new projects are located, is deficient in infrastructure and the move to production will require the upgrading of existing roads, ports and water supply routes, and the importation of diesel power.

NextSource Materials, formerly Energizer Resources, is one company looking to Madagascar and has plans to develop graphite and vanadium deposits. The Molo Graphite Project is moving towards production at a rapid rate after being reconfigured to a more bite-sized format with a capex at a fraction of previous plans.

The Green Giant Vanadium Project shares the same block of land but is distinct from Molo and is now attracting interest due to the resurgence of vanadium owing to the booming cleantech/battery technology industries.

Massive nickel/cobalt deposits along with mineral sands, and deposits of graphite and vanadium seem destined to lead Madagascar from being a bit player to being a force.

The country’s resources potential seems impressive, and if the government can continue along its current deliberate path, albeit slow, then mining will become an attractive alternative to a primarily agricultural export base.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com