Antananarivo, Madagascar — MININGREVIEW.COM — 24 November 2010 – New nickel and copper exports are the two key developments behind the prediction by the transitional government of Madagascar that its economy will grow by 2.8% in 2011, after lower-than-forecast 0.6% growth this year.
In the budget presented to parliament here, the Indian Ocean island’s government said it had been expecting growth of 2.6% in 2010, but continued political instability had undermined that prediction. Madagascar has been mired in political uncertainty for most of the past two years.
The resultant economic downturn has left the government short of the finances it needs to fulfil pledges to cut poverty and improve social services. But the government has been banking on a mining boom to return its economy to the 7.1% growth seen in 2008, and a major nickel and cobalt project is scheduled for completion in January 2011.
The mine in Ambatovy is about 80 km east of the capital, Antananarivo, and is projected to produce 60 000t of nickel and 5 600t of cobalt annually for 27 years. It is a joint venture between Canada’s Sherritt International, Sumitomo Corporation, Korea Resources and SNC-Lavalin.
A subsidiary of UK-based multinational Rio Tinto Plc has also been producing and exporting high-quality ilmenite, which is used to make titanium dioxide, since 2009.
Other companies are looking for gold, coal, chromium, platinum and uranium, while oil majors Total and Exxon Mobile have invested in the country’s offshore oil potential.