Kumba Resources titanium project to cost $150 million

An exploration company that found a potentially huge titanium deposit in Madagascar has said it expects the 30-year project to cost $150 million, a fraction of Rio Tinto's $585 million mine opened last year.

Madagascar Resources director Jules Leclezio said a feasibility study of the Toliara sands project in the southwest, which Kumba Resources has an option to buy outright, would be completed by the end of 2008.

"We will need $150 million to finalise the project," Leclezio told journalists in Antananarivo on Tuesday.

He added that this made it less costly than Rio Tinto's rival titanium mine, which will need a $585 million investment over its lifespan.

Last year Rio Tinto announced it would go ahead with its concession to mine ilmenite, the ore of titanium dioxide -- a white pigment used to colour paint, plastics and toothpaste -- in Taolagnaro, southeast Madagascar.

Mining experts say the world's fourth largest island, though largely unexplored, has big untapped reserves of minerals including titanium, nickel, sapphires and precious metals.

Rio expects its ilmenite project to yield 750,000 tonnes annually. Kumba Resources expects to get 575,000 tonnes.

But officials at Kumba say their Toliara concession, though still in its infancy, has better surrounding infrastructure, including a functioning port that could ship out the ilmenite with only a small modification.

Toliara also has better roads leading to the capital.

Rio, by contrast, will have to build a port from scratch in a region cut off from the rest of the island by poor dirt roads.

Leclezio said a bankable feasibility study, paving the way for the mine to be opened, would take about two years.

"(We) will be in a position to know the feasibility of the Toliara Sands Project over the course of 2008," he said. "A bankable feasibility study has already started this year."

Environmentalists have raised concerns about mining projects such as Rio Tinto's, which they say threaten valuable forest housing thousands of unique species.

But Leclezio said the Toliara project was "well outside any forested areas".


By Honore Razafintsalama

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