Mining in Madagascar
Country and Sector Background
The Republic of Madagascar, which is the world's fourth largest island, is about 420 kilometres east
of Mozambique off the coast of Africa in the Indian Ocean. Its population is presently approximately
15 million. Madagascar is one of the poorest countries in the world, with annual per capita income
of approximately US$260. 70 percent of the population in poverty and half of the children malnourished.
After decades of economic stagnation and downturn, the country has sustained several years of
positive real growth and low inflation, and the public deficit is under control. After having been
one of the most rapidly growing African economies in recent years, Madagascar plunged into a deep
political crisis at the beginning of 2002, following contested first-round elections in December
2001. The political crisis ended in July 2002, but some residual social and economic impact remains.
Political History
Formerly an independent kingdom, Madagascar became a French colony in 1886, but regained its
independence in 1960. During 1992-93, free presidential and National Assembly elections were
held, ending 17 years of single-party rule. In 1997, in the second presidential race, Didier
Ratsiraka, the leader during the 1970s and 1980s, was returned to the presidency. The 2001
presidential election was contested between the followers of Didier Ratsiraka and Marc Ravalomanana,
and was accompanied by considerable civil unrest. In April 2002 the High Constitutional Court
announced Ravalomanana the winner and political stability has resulted.
Madagascar now has a favorable climate for foreign investment following the general election
establishing a democracy, led by President Mark Ravalomanana. We have met with the Minister of
Mining, Director of Mines, and numerous other local officials and government administrators in
order to properly evaluate the investment climate and understand the nature of requirements to
do business in Madagascar.
Why Madagascar?
There were several deciding factors that led to the selection of Madagascar. First, Madagascar has
an abundance of unexploited precious and semi precious gemstone and gold deposits, as well as large
deposits of bauxite, coal, copper, lead, manganese, nickel, platinum, titanium, zinc and zirconium.
Secondly, Madagascar has just completed widespread government reforms, including many in the mining
sector that make now make it attractive to outside investment. The political situation is thought
by most to be more stable than it has ever been before, with the President focusing on
economic / business development as a major thrust to growing the economy and improving the way
of life for Madagascar. Lastly, many of the world's economic development programs such as USAID,
International Monetary Fund and The World Bank Group have committed significant investments and
resources to improve several areas of interest, including a 5-year reform program designed to
attract large-scale mining projects.
The Mining Sector in Madagascar
Although governance problems have characterized Madagascar's mining sector for years, recent reform
and anti-corruption measures taken by the Government have slowed illegal activities and laid the
groundwork for a positive environment to exist in the mining industry for many years to come.
The Mining Sector Reform Project (led in part by the World Bank Group) assisted the Government
in setting up a legal and regulatory framework conducive to private investment in the area of mineral
resources, in line with its overall policy, defined in 1998 in the Document Cadre de Politique
Economique (DCPE), whose key objectives are shifting the role of the State from operator to regulator
and promoter of sustainable minerals development, and opening up of the sector to private investment,
including foreign.
Reforms, supported by the MSRP, include (i) a new mining code and its regulations, that have
established an adequate legal and regulatory framework to attract private investment into mining,
including environmental regulations for mining, published jointly by the Ministry of Environment
and the Ministry of Energy and Mines; (ii) a special law for large-scale mining investments,
defining an attractive special investment regime for mining in Madagascar, and providing for a
fair share of revenues between the Government and the private sector, an adequate cut for the
Provincial Governments; and (iii) improved governance through the establishment of a non-discretionary
and transparent system to grant, manage and cancel mining permits, the Mining Cadastre.
|
 |
Learn more about our properties in Madagascar by clicking a location below.
Download a map of Madagascar with Pan African locations marked.
|
