International firms eye Madagascar's oil and coal - Feature

Antananarivo - The worldwide search for new oil and gas reserves has now reached the island-state of Madagascar off of Africa's eastern coast. So far, 17 international petroleum companies are involved in a race to discover new oil fields on the world's fourth-largest island, according to media reports.

The Madagascar Oil company is already pumping oil in the Tsimiroro and Bemolanga regions in the south. Meanwhile the government is considering 25 contracts for awarding production rights, six of them in offshore regions and the other 19 on the island itself.

But plans are afoot to more strongly develop the tropical island's coal reserves which are estimated at 135 million tonnes. According to reports, exploitation of reserves in a 50,000-hectare area in the Betioky district south of the Atsimo Andrefana region is soon to get underway.

Domestic coal would then as quickly as possible replace the environmentally-damaging charcoal, for the production of which large sections of forest are sacrificed every year.

In most of the homes on the island, which has a flora and fauna regarded as unique in the world, cooking is still mainly done with wood or charcoal derived from the pine and eucalyptus forests.

Madagascar Consolidated Mining (MCM) is the only company on the island with a license for production in the region of the Sakoa Basin with its wealth of coal reserves.

According to general director Jacky Rabarison, there has been close cooperation with the World Wide Fund for Nature (WWF) in the exploration work done so far. The burdens to the environment of the mining region, especially carbon-dioxide emissions, are to be kept as low as possible, he said.

This year and 2008 are reserved for exploration and creating infrastructure for the coal projects, while in 2009 the financing is to be arranged.

By then, partners from around the world will be sought so that in 2010, according to current planning, production could start up with an initial output of 45,000 tonnes of coal per year.

The coal in Sakoa must be processed in several stages before it can be offered, in the form of briquettes, to households, chiefly in the south-western part of the island near the port city of Tulear, an area where there are now only remnants of the local forest remaining.

Investors from Australia and Britain, according to Rabarison, have already signalled their interest in the coal mining. But there were also queries from China, India and Japan about importing the coal.

Under the plans, 70 per cent of the total coal deposits would be mined over a 25-year period, whereby 10 per cent would go for fuel for households. The huge portion of the coal produced would be used for producing electricity and thermal energy.

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