MAC: Mines and Communities

Rio Tinto Mine Lifts Hopes of Madagascar Progress

Published by MAC on 2005-08-04

Rio Tinto's massive mineral sands project. on Indigenous territory in southeast Madagascar has met with huge opposition since the eighties. The World Bank withdrew its support in the early days.

Conservation International - one of three environmental groups, along with WWF and Friends of the Earth (England, Wales and Northern Ireland) to strongly oppose the mine -- has now changed its tune (Conservation International was paid by Rio TInto to do a critique of the original proposal).

Friends of the Earth, however, remains far from convinced. (Click here for a copy of FOE's critique).

Rio Tinto Mine Lifts Hopes of Madagascar Progress

Planet Ark

August 4, 2005

ANTANANARIVO - Madagascar is hoping that Rio Tinto's decision to proceed with its southern titanium dioxide mine will develop the cash-starved island and become a model for environmentally sensitive mining.

The world's second largest diversified miner on Wednesday said it had approved a $775 million titanium dioxide project comprising a new mineral sands operation in southern Madagascar and facilities upgrade in Canada.

"The whole thing will take about three years to build. We expect the first shipment of the product to be in the third quarter of 2008," Rio Tinto business development vice president, Gary O'Brien, told Reuters on a trip to Madagascar.

The project is expected to have an initial capacity of 750,000 tonnes a year of ilmenite, the white pigment derived from titanium which is used to colour paint, paper, plastics and toothpaste.

For Madagascar's government, keen to find sources of investment on the island of 17 million, three quarters of whom live on less than a dollar a day, mining is a key sector.

Rio Tinto estimates that over $20 million a year could accrue from its 40-year project to the government in taxes and dividends.

"There'll be 1,700 construction jobs during the period of construction. We will employ at least 600 people (in the mine) and generate tax revenues and royalties," said O'Brien.

Taken Seriously

In an interview with Reuters shortly after Rio Tinto's announcement, Madagascan Minister for Energy and Mines Olivier Donat Andriamahefamparany said the project would encourage foreign investors to take Madagascar seriously.

"It's proof that big foreign investors are willing to invest in our country," he said.

"This is a good thing and a strong signal for other investors." Andriamahefamparany said he was "very confident".

"It will contribute to the growth of our economy. Studies have been made and they conclude that this project can have a strong impact, social and on the environment."

The mine has pitted the company against environmental groups who say it will wreck an irreplaceable stretch of coastal forest holding some of the world's most unique wildlife.

Recently, however, Rio Tinto has impressed environmentalists with efforts to offset environmental damage, including creating conservation zones and tree nurseries and planting eucalyptus trees for firewood for locals, tackling a major cause of deforestation.

"Rio Tinto has come a long way from being a traditional mining company to being very responsible," said Conservation International regional vice president Leon Rajaobelina.

"They have come to realise that looking after the environment is good for business."

The company's plans to replant the tropical forest they have to trash to get to the ilmenite after they have finished has also been met with scepticism.

Rajaobelina said conservation groups were now satisfied it could be done. "They've done forest restoration in South Africa and it worked well," he said. "Their reforestation programme gives good results."

But some environmental groups are yet to be convinced the mine will do more good than harm.

"Make no mistake: this will be an environmentally damaging project," said Ed Matthew, head of corporate responsibility at Friends of the Earth.

"They're removing most of the forest -- a threatened forest, completely changing the local environment"

Matthew said speculative migration could do social harm. "They can't know the worst impacts from, for instance, migration...if the project does have (negative) social and environmental impacts, we will make them accountable."

Story by Tim Cocks



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