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Africa’s new mining province
David McKay
Posted: Tue, 19 Jul 2005
[miningmx.com] -- THE decision by Impala Platinum to join the Canadian firm, Dynatec Corp., in developing $2.25bn nickel mine on Madagascar provides further evidence the exotic African island is establishing itself as a new mining province. But this economic reality is grievous to environmentalists who prize the island’s unique wildlife and flora, particularly the shrubs and creatures along its peninsula.
Madagascar tore off the coast of Africa and sailed into the Mozambique Channel about 165 million years ago. As a result, the place is rich in unique animals. In an age of lobbying and pressure groups, building mines there can be problematic.
Yet, mining there is. Kumba Resources is developing a mineral sands project, Toliara, on Madagascar through its Ticor subsidiary, and is also hoping to beat Rio Tinto to market which has similar plans. “We’re very excited about the prospect,”
says Con Fauconnier, Kumba’s CEO. “It’s a big deposit but we have to work through issues related to water and power supplies, and loading concentrate from the mine on a ship,” he says. A feasibility study on Toliara is currently underway.
Rio Tinto’s $350m ilmenite mine, with planned annual production of 750,000 tons, is awaiting approval but has been dogged by the opposition of environmentalists.
Mining is likely to win the battle because Madagascans are so terribly poor; more than three-quarters of the country’s 17 million population live on less than a dollar per day. The World Bank hopes mining, among other industries, can pump $400m/year to the island. Local government will own a fifth of Rio Tinto’s project which could net it $21m/year in taxes and dividends.
In addition, mineral sands (ilmenite) and nickel, Madagascar is also thought to be rich in semi-precious stones, diamonds, gold and bauxite.
Colin Bird, CEO of Jubilee Platinum, a UK
listed mining firm, is managing 10-year exploration permits searching for platinum group metals as well as copper and nickel. All in all, the company owns some 15,600 hectares of land in the Londokomanana region.
“The country has quite extraordinary potential,” says Bird. “I learned a few years ago that you’ll never rival the Bushveld (which contains about 80% of the world’s platinum group metal deposits). But by jove, there’s a strong possibility of good pgm potential in association with nickel and copper”.
Project engineering company, SNC-Lavalin, comments in its feasibility study of the Ambatovy project that the legal and operating framework of the Malagasy government was relatively benign. Bird agrees: “They are falling over backwards trying to attract investment,” he says. “There is now a legal framework in place whereby foreign companies can own land and mineral rights in Madagascar with secure tenure,” says SNC-Lavalin.
The island’s infrastructure
is also improving with the possibility of hydro-electric (cheap) power. “Once you get a couple of mines operating there, Madagascar will become wide open,” says Bird.
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