Madagascar Hopes to Boost Development through Mining

Mines and Energy Minister, Olivier Donat Andriamahefamparany, said Madagascar would try to learn from the poor experiences of other African mining and petrol hotspots.
"Mining has not got a good record in developing countries. That's something we want to change," he told Reuters. "We are taking lessons from other countries in Africa."

The Indian Ocean Island's mining sector is currently tiny, consisting of a few small chrome, graphite and sapphire mines, but officials say that is set to change.

Rio Tinto, the world's second largest diversified miner, last year confirmed it would go ahead with a $775 million titanium project in southern Madagascar.

The company hopes to start shipping titanium ore out by 2008.

Canadian company Dynatec plans to build a $2.25 billion nickel and colbalt mine in the east and Kumba Resources has a big titanium concession in the south.

Exxon Mobil Corp, the world's biggest oil company, last month set up an office in Madagascar as it prepares to drill for oil in two big blocs offshore.

Speaking on the sidelines of a conference on mining and sustainable development, Andriamahefamparany said Madagascar was overhauling its mining code to put obligations on mining companies to contribute to local development.

"We want to put soft pressure on the extractive industries to accept this new challenge," he told Reuters.

"We want to put in place this model, so when (mining companies) come to Madagascar there is already something for them to integrate themselves into."


ENVIRONMENTAL WORRIES

Environmentalists have objected to mining projects in Madagascar, saying they threaten wildlife on the island, which is second only to Brazil for unique biodiversity.

"We have to reconcile economic development with protection of the environment," said Andriamahefamparany.

Some mining companies including Rio Tinto - long a favourite target of conservation groups - appear to be taking environment issues seriously.

"The mining sector has come to understand that if it acts badly with respect to the environment, it will lose investment," said Martin Nicoll, from the World Wide Fund for nature.

Success stories amongst countries blessed with mineral wealth are few, and some analysts talk of a "resource curse."

"Some countries have not managed resources for poverty reduction effectively," Kathryn McPhil, head of the International Council on Mining and Metals, told Reuters.

Some companies, like Exxon Mobil, say they won't get involved in good governance initiatives, arguing that how a government spends its royalty is its business.

"It's not enough to say 'that is not our job';" McPhil said. "The companies can be partners to help build the capacity of government."



Story by Tim Cocks

Madagascar hopes to speed up its development by urging mineral companies to help fight poverty and protect the environment, the energy and mines minister said on Tuesday.

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