Madagascar is an island country located off the south-eastern coast of the African continent, to the east of Mozambique. The total area of the country is 587,041 km2 and it has a population of 22,585,517 as of July 2011. The country’s climate varies from tropical along the coast to temperate inland.
|The national flag of Madagascar.
Image Credits: CIA Factbook
Madagascar gained independence in 1960 and ever since has been hit by political instability. The country’s mining industry does not play a significant role in its economy and its GDP is $20.66 billion as of 2011.
Madagascar has a wide variety of gemstones, but the production of gemstones decreased considerably during 2008-2009 due to the economic downturn causing the worldwide demand to reduce. However, gemstone mining does help to generate many jobs especially in the regions of Sakaraha and Ilakaka where about 50,000 workers are employed.
Overview of Resources
Madagascar has plenty of unexplored mineral and metal reserves. The country accounted for 3% of the world’s ilmenite production in 2010, and was also one of the top sapphire producers in the world in 2008. Gemstones, chromite, ornamental stones, nickel and cobalt mining are extensively mined in the country.
Madagascar’s mining production statistics as of 2010 are as follows:
- Mica increased by 478%
- Agate increased by 300%
- Quartz increased by 291%
- Zircon increased by 81%
- Ilmenite increased by 79%
- Rutile increased by 78%
- Labradorite increased by 32%
- Limestone and marble increased by 13%
- Cement increased by 11%
- Graphite increased by 10%
Most of Madagascar’s gold reserves are known to be of mesothermal “lode” quartz-hosted type, which is an extremely valuable type accounting for 20% of world gold reserves. In the past, the country has been considered as one of the best gold exploration places in the African continent.
Tantalus Rare Earths AG of Germany completed a drilling program in the Antsiranana Province in 2010, which is an area rich in tantalum, zirconium, niobium, and rare-earth elements (REE).
Mining for nickel-cobalt laterite deposits in Ambatovy has been started by a joint venture of Sherritt International Corp. of Canada, Korea Resources Corp. of the Republic of Korea, SNC-Lavalin Inc. of Canada, and Sumitomo Corp. of Japan.
In 2010, ilmenite production by QIT Madagascar Minerals SA (QMM) increased to 287,000 Mt from 160,000 t. The company is set to reach its full production capacity of 750,000 t/yr of ilmenite and 40,000 t/yr of zirsill by the year 2013.
Malagasy Minerals Limited, an Australia-based company, is dealing with silver, nickel, copper, PGE, and vanadium mineral exploration. Its projects, namely, Vohibory project, Ampanihy project, and Fotadrevo project, are situated in south-central Madagascar. The Vohibory project is said to have gold reserves as well.
Industrial Minerals and Gemstones
Holcim (Madagascar) S.A. owns cement plants at Toamasina and Ibity, with a production capacity of 300,000 and 160,000 t/yr, respectively. Madagascar Long Cimenterie (Maloci) of China also owns a cement plant with 360,000 t/yr capacity.
Madagascar is a significant global producer of gemstones such as sapphire, emerald, and ruby. Sapphires were produced at Manombe, Marosely, Sakaraha, and Ilakaka, emeralds were produced near the region of Mananjary, and ruby at Vatomandry and Andilamena.
Sapphire mining has been in progress since 1998 when it was first discovered at Ilakaka and Sakaraha. From then onwards, the country has dominated global sapphire production. Alexandrite, garnet, chrysoberyl, zircon, spinel, and other gemstones were also mined at Ilakaka and Sakaraha.
A green andradite garnet called the Demantoid garnet has been mined from reserves near Antetezambato in the northern part of Madagascar since March 2009. The output from this mine is estimated to be about 20 kg/week.
About 300 kg of dark blue aquamarine was mined in July 2009 from a pegmatite at Tsaramanga in central part of Madagascar.
The map of Madagascar. Image Credits: CIA Factbook
Asia Thai Mining Co. Ltd. of Thailand has been working on developing a new mine in the Sakoa coalfield based on its feasibility study. Straits Resources Ltd. of Australia also conducted exploration operations in the Sakoa coalfield in 2010.
Madagascar Oil Ltd. of USA has been drilling for heavy petroleum at the onshore Tsimiroro project since 2010. Further drilling work is also being planned by the company. The Tsimiroro reserve is estimated to have 965 million barrels of petroleum.
The government of Madagascar lifted the ban on export of rough gemstones in July 2009, spearheading the production and global demand for gemstones, and attracting foreign investors to the country once again.
Currently, the government is battling illegal mining in Madagascar's newest national parks, which is a rich source of sapphires, and in the Ranomafana National Park famous for gold reserves. Despite these issues, the latest discoveries will ensure that revenue from gemstones will aid the country’s economy.
Madagascar's new mining code is an ethical model that will improve gold pricing and enhance facilities for the community. It is being tested in Antanimbary. The mining code will ensure that small-scale or artisanal miners are recognized and brought inside the formal economy. Depending on the success of this code in Antanimbary, the government plans to launch it as a nationwide regulation. Under this code, a gold miner has to pay $1.5 (75p) for an annual permit, while gold collectors have to pay $50. The amount thus collected will be sent to the mayor’s office to aid in funding community projects.
Zamarat Mining, a European-based exploration company, is currently developing mining assets in the country. Once the pre-feasability studies and evaluations are completed, the company will conduct mining operations to extract sapphire, gold, diamond and other natural resources located in southern Madagascar.
Several economic reforms have been introduced in the country. The mining code has also been updated to include reduction or elimination of customs duties, reduced income and dividend taxes, a uniform licensing regime and rights to international arbitration of disputes. These changes have been made to attract foreign investments, which are essential to tapping the resources of this predominately unexplored island.
Madagascar's mineral industry is all set to experience significant growth in the future given that the world market conditions and the local political situation remain stable.
Disclaimer: The author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.
Sources and Further Reading