Positive Environment News

FEATURE - Madagascar's Mining Project Draws Mixed Reaction

Date: 30-Mar-05
Author: Tim Cocks

"It is going to get better here," he says, as the car sweeps past rows of dilapidated wood-and-thatch huts. "When this mining project gets opened, it will bring money."

The hoped-for project belongs to Rio Tinto. The world's second largest diversified miner has a concession in the region to develop a $350 million ilminite mine with an annual production capacity of 750,000 tonnes of the pigment used to colour paint, paper, plastics and toothpaste.

This year the company plans to make a final decision about whether to go ahead.

The mine has for years pitted the company against environmental groups who say it will wreck an irreplaceable stretch of coastal forest and displace the communities living around it. But for many Madagascans, it is a chance to develop the huge Indian Ocean island' most economically deprived region.

"There will be jobs and they'll bring sponsorship," said Tsiong.

His taxi driver, Anthony, is no less enthusiastic. "They are going to bring us paved roads", he said. "This will be better for the taxis."


For Madagascar's government, keen to find sources of investment on the island of 17 million, three quarters of whom live on less than a dollar a day, mining is a key sector.

The World Bank thinks it could bring $400 million a year to the impoverished island.

Though largely unexplored, mining experts think it has big reserves of nickel, ilmenite, sapphires, rubies, diamonds, gold and bauxite.

Its three biggest mining projects -- Dynatech's nickel concession in the east and two big ilmenite deposits owned by Ticor and Rio Tinto in the south -- each promise to swell government coffers.

"The paradox is that Madagascar, though extremely poor, is rich in raw materials," World Bank country director James Bond told journalists.

"To have a big, serious company like Rio Tinto extracting that wealth is very good."

Though the government owns just a 20 percent stake in the project, the company estimates that $21 million a year will accrue in taxes and dividends, 70 percent going back into the region.

Besides revenue, the World Bank says construction of a big commercial port to transport the ilmenite will connect the isolated region to the global economy.

"(Taolagnaro) is remote and the roads are bad," said Bond. "A port will allow it to be provisioned with things like rice and petrol, which are expensive because of transport."

Rio Tinto is negotiating with the government to pay some of the costs because of this.

Critics say the benefits of the project are unlikely to outweigh the costs, social and environmental.

They doubt whether an international port will be much use in a region that, with the exception of a few sisal plantations, doesn't export anything.

"Given that the main use of this port will be the export of ilmenite and Rio Tinto will be making the biggest profits, shouldn't they be paying for it themselves?" said Ed Matthew, head of corporate responsibility at Friends of the Earth.

They also say the project will be socially disruptive.

"The mine will bring over 400 foreign workers into a small town, increasing the risk of HIV," said Yvonne Orengo, who heads the local charity the Andrew Lees Trust.

"The immigrants will compete with large numbers of unemployed ... causing great social stress."

Rio Tinto says it will make efforts to mitigate any negative social effects.

"We have state of the art HIV prevention programmes for all workers on the site," said Lisa Dean, director of the company's social programme in Madagascar.


Environmentalists say the mine will involve tearing up hundreds of acres (hectares) of forest which is home to thousands of species of plant and animal life found nowhere else.

Responding to critics, Rio Tinto set aside 230 hectares (570 acres) of its 2,000-hectare concession as a conservation zone.

It say

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