London, England — MININGREVIEW.COM — 19 March 2009 – Mining and oil companies operating in Madagascar do not expect the appointment of a new president by the country’s new military leadership to affect their operations in the country significantly.
Rio Tinto – which is Madagascar’s biggest foreign investor – said it foresaw no problems for its titanium mining operation and licence, after the opposition had taken power through the country’s military force.
“We have no reason to believe that the change of regime will have an adverse influence on our operation,” spokesman Nick Cobban said in an e-mail in response to an enquiry from Reuters.
“We believe the mine already has and will continue to bring positive benefits to the country, and that the terms of the mining concession are equitable to all parties.”
Recently Rio – the world’s third-biggest mining group by market value – was locked in a dispute with the former government of Guinea, which withdrew the company’s rights to about half of its huge Simandou iron ore project. A new military government in Guinea has said it wants to revise the mining code and clean up corruption, but no details have emerged.
Rio’s mining operation in the south of Madagascar – which cost US$1.2 billion (R12 billion) to build – was the largest ever foreign investment in Madagascar. Cobban said the World Bank, which helped provide finance for a port near the mine, has said it does not support renegotiation of Rio’s mining concession.
Operations have been normal at the mine, which is far from the capital, the main focus of anti-government strikes and protests that have killed at least 135 people on the Indian Ocean island.
Rio launched production in January at the mine, of which it owns 80% and the government the other 20%. Its main product is titanium, a white pigment used in paint and other coatings, paper, plastics and cosmetics.