Malagasy mines benefit from the global situation

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From gas to wheat, via coal, cotton or rapeseed oil, the prices of raw materials on world markets have soared since the invasion of Ukraine by Russia. In Madagascar, the mining sector is doing well. Very weakened after two years of Covid, the island’s extractive companies – which generated 60% of the country’s foreign exchange earnings before the pandemic – see in the rise in prices beautiful opportunities.

From our correspondent in Antananarivo,

According to industry experts, this phenomenon of rising prices observed in recent months on the Big Island is mainly due to strong demand generated by the risk of a potential shortage of these raw materials. A favorable increase for the country, explains Jean-Luc Marquetoux, president of the Chamber of Mines of Madagascar: “ The rise in prices has generally had a favorable impact on Malagasy companies which extract nickel and titanium in particular. This being so, it must also be taken into account that at the same time, they had to undergo a form of inflation in terms of their operating costs, to speak mainly only of logistics costs. »

The price of titanium has taken 54% since September 2021; +20% for that of nickel. And this improvement could, according to the specialist, extend over time. ” If we look beyond the crisis in Ukraine, prices should remain strong over a five- to ten-year horizon, mainly for all substances linked to the energy transition, to name only nickel, cobalt, lithium, graphite, which are used as components in the manufacture of new generations of batteries and which are all substances which are today already produced in Madagascar or the subject of projects in the exploration phase “, he explains.

This is good news for the country, whose other foreign exchange earning sectors, such as vanilla or fish products, are currently going through a period of turbulence. ” This positive impact will be felt both at the level of the national economy, with a strengthening of the contributions of the mining sector to the national economy, and at the level of the balance of these companies which today produce and export. already these substances in Madagascar », continues Jean-Luc Marquetoux.

Mining operators are in fact subject to what are known as “rebates and royalties” at a fixed rate, calculated on the value of their production. Thus, if sales increase, tax revenues for the state also increase. According to the World Bank, this sector could therefore become one of the main contributors to the country’s economic recovery. However, the freezing of mining permits decreed since 2011, and which according to civil society, has largely contributed to fostering corruption in this area, remains a huge handicap for this sector, which is nevertheless essential to the country.

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