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Last Updated: Jun 29, 2009 - 8:30:33 AM |
President Marc Ravalomanana was overthrown by a popular but
undemocratic uprising in March, partly motivated by anger over
concessions to foreign firms.
The Ravalomanana administration had improved the terms of investment
for foreign firms in most sectors and the country was benefiting from
strong growth in the mining industry but there must now be some doubt
over further investment in the sector.
Rio Tinto is the biggest investor in the country and is developing the
$1B QIT (Quebec Iron and Titanium) Madagascar Minerals ilmenite
project, which includes the construction of the new port of Ehoala at
Tolanaro in southeast Madagascar.
As of early April, the company had yet to be informed of the
government’s position on the project, although a Rio spokesperson said
that the contract “can only be amended by parliament which the new
government has dissolved.”
QIT began production in January and the first shipments, to a Rio Tinto
smelter in Quebec, were due by the end of April. Output of 750,000 tpa)
is initially targeted, with expansion to 2 mtpa already planned.
The port, which is intended to be a multi-user facility eventually
owned by the government, is now complete and it had been hoped that its
development would attract other mining investors to the Indian Ocean
island nation.
Rio Tinto invested $110M in the port, with a further $35M provided by
the World Bank. Rajoelina has pledged to impose higher royalty payments
on those investors that are allowed to retain their mining concessions.
Source:Ocnus.net 2009
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