Mining, Famine and Infrastructure: Good News and Bad in Madagascar

28 September 2021 Leighton G. Luke, Research Manager, Indo-Pacific Research Programme

While the world’s first “climate change famine” continues unabated, the Madagascan Government’s ambitious infrastructure plans and updates from two Australian mining juniors with projects in Madagascar bring some welcome good news.

 

Background

Recent weeks have brought forth a flurry of news – some good, some bad – from Madagascar. A lengthy drought in the south of the country shows no signs of abating and has been labelled the world’s first “climate change famine”, but some good news comes from the Madagascan Government in the form of ambitious infrastructure plans and from two Australian mining juniors, both of which are increasingly optimistic about their Madagascan projects.

 

Comment

The United Nations World Food Programme (WFP) estimates that 1.3 million people in Madagascar are now food-insecure, with some 30,000 people in the country’s south currently experiencing the highest internationally-recognised level of food insecurity: level five, or “catastrophe level”.

In what the WFP has termed the world’s first “climate change famine”, the area’s traditional subsistence farming practices have been rendered redundant by the chronic lack of rainfall; large numbers of people in the Grand Sud region have now been reduced to eating locusts and cactus fruit as the area endures its fourth year of drought. It is a situation that will only further worsen as the October-December dry period approaches; the WFP expects the number of people requiring at least some food assistance to rise to 1.31 million.

Adding to the problems identified by the WPF, UNICEF has estimated that 79 per cent [in French] of Malagasy children between six and twenty-three months of age suffer from malnutrition, even by local standards. UNICEF goes on to say that, ‘an estimated 357,000 children under five years will suffer from acute malnutrition by the end of 2021, and among these, 120,000 will be severely malnourished.’ In the Grand Sud region, the WFP aims to provide emergency food assistance for up to one million people, as well as supplementary food assistance to prevent and treat malnutrition in children under five years of age.

In his address to the UN General Assembly on 22 September, Madagascan President Andry Rajoelina called upon the rest of the world to ‘put its money where its mouth is’ and for all countries to ‘act equitably and in line with their polluting actions’ to address climate change. Madagascar ‘produces 0.01 per cent of the world’s annual carbon emissions’, yet is among the countries most vulnerable to the effects of climate change, with increased droughts and aridity in the south and flooding in the north of the country.

Not all of the news from Madagascar has been negative, however. Two Australian mining juniors have announced promising results from their operations on the so-called Grande Île. Perth-based Base Resources has announced that, subject to final approvals eventually being granted, it will scale up its mineral sands project near Toliara, on the south-western coast. The Toliara project holds deposits of ilmenite, zircon and rutile.

Over the life of the mine, the Toliara operation is expected to produce an average of 960,000 tonnes per year (t/y) of ilmenite, 66,000 t/y of zircon and 8,000 t/y of rutile. Although the Malagasy Government halted the project in 2019, citing opposition from local communities and unfavourable financial terms for the government, the fact that the project is now ‘forecast to generate almost US$2.0 billion in direct government revenue and community development expenditure over the 38-year mine life’, may be an incentive for the development-minded Rajoelina Administration to work with the company and local residents to correct any irregularities and re-issue the relevant permits.

Meanwhile, Melbourne-based Akora Resources has reported ‘very encouraging’ results from drilling at its iron ore project at Bekisopa, in south-central Madagascar. According to the company, ‘two zones of massive iron ore mineralisation, extending to a depth of 185 metres’ were found. The Bekisopa project is thought to contain approximately 100 million tonnes of direct shipping high-grade ore.

On 20 September, President Rajoelina’s government inked two significant infrastructure agreements with the French Minister for Europe and Foreign Affairs, Franck Riester, for the expansion of the Mandraka-III hydro-electric power station and the construction of a public transport cable car (téléphérique) system in the capital, Antananarivo, a sprawling, frequently chaotic city of around two million inhabitants, much of which is built over hillsides and along ridgelines. Expected to be operational in June 2023 [in French], the Antananarivo cable car is no doubt based on the success of similar cable car networks in a number of even hillier South American cities, including Medellin (Colombia), Guayaquil (Ecuador) and La Paz (Bolivia).

Comprising two lines measuring twelve kilometres in length, the cable car project will require the installation of 75 pylons carrying 274 cars, each capable of carrying between 10 and 12 people. Carrying a price tag of €151 million ($242.5 million), most of the cost will be met by the French Treasury and contractors. The project is expected to be used by up to 80,000 passengers per day, although, with fares predicted to be in region of between 3,000 to 4,000 ariary ($1.04 to $1.39), the price may be too steep for many in a country where, in 2019, up to 75 per cent of the population lived on less than US$1.90 per day. The cable car will use 2.2 megawatts of electricity to function, further necessitating the Mandraka-III power project, which will double the amount of electricity currently generated at that power station while also increasing the national electrification rate from 15 per cent to 50 per cent by 2023 and facilitating the future adoption of more renewable generation practices.

In what will be a welcome development in the drought-stricken south, the Rajoelina Government has also announced plans for a long-distance pipeline to send water to the Grand Sud region, the largest project of its kind ever undertaken by the Malagasy Government. While that project is many years away, if it gets off the ground at all, the occurrence of longer and more frequent droughts in southern Madagascar highlights the future importance of such infrastructure.

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