- Australian firm Base Resources has been trying to develop a large mineral sands mining project in southwest Madagascar.
- A year ago, the project appeared close to securing the permits it needs to break ground, but its fortunes changed when the government suspended the project last November.
- Now, a branch of Madagascar’s Supreme Court has issued a report on the governance of the project that cites irregularities in the issuance of permits, the transference of land rights, the management of a protected area, and the consultation process with local people.
- Civil society groups are calling for the government to cancel the project, but it’s not yet clear when the government will make a definitive decision or how much the court’s report might influence it.
A year ago, Base Resources, an Australian mining firm, seemed to be nearing the “go” phase of a large mineral sands project in southwest Madagascar. Although some local people opposed the project, the company appeared to have its permits and construction plans in order, and it forecast shipping out the first batches of ilmenite, a base material for white pigments used in products like paint and toothpaste, in 2021. Yet today, the company’s future in Madagascar looks dimmer.
In November 2019, Madagascar’s government suspended the project, citing “violence and conflict with host communities” and a lack of clear benefits to the Malagasy people and government. The pandemic then slowed the company’s efforts to negotiate a restart, and after almost a year, the suspension remains in place. Meanwhile, the global economic contraction has dimmed its financing prospects. Now, the news has only gotten worse for the mineral sands firm.
On Sept. 9, Madagascar’s Court of Auditors, a branch of the Supreme Court, issued a report on the governance of the project. It cited irregularities in the issuance of permits, the transference of land rights, the management of a protected area, and the consultation process with local people. It was the first such judicial report on a mining project in the country’s history, and its contents are damning for the government.
In response, a coalition of two civil society groups have called for a definitive end to the project, citing its potential to damage the environment and infringe upon the “fundamental human rights of the concerned communities.” They say the report is evidence that Base Toliara, a Malagasy subsidiary of Base Resources, does not have a legal permit to mine in Madagascar.
“This is a major step towards a better protection of the rights of affected communities as well as towards the effective application of the principle of accountability in Madagascar,” Volahery Andriamanantenasoa, program director at CRAAD-OI, one of the two groups, told Mongabay in an email. “The systematic implementation of this type of audit is an important guarantee for the establishment of a genuine good governance of the mining sector.”
What the court’s report says
In auditing the governance of the Base Toliara project, the court drew four main conclusions. First, it found that Madagascar’s mining ministry did not follow the law in issuing the company an exploitation permit in 2012. (The company, then named Toliara Sands and owned by Australian firm World Titanium Resources, changed names to Base Toliara in 2018 after Base Resources acquired it.) At the time, Madagascar’s Council of Ministers, led by the president, had a suspension in place for the issuance of all such permits.
The president, Andry Rajoelina, had committed to the suspension under international pressure, having come to power in 2009 following a coup d’état. As part of the transitional government, ministries were only meant to run the “day-to-day affairs of the country” and “refrain from making new long-term commitments,” per law signed at the time.
Second, the court found that the protection of sensitive and protected areas remained a concern because the mining and environment ministries had not coordinated regulation of a mining road. Base Toliara’s proposed haulage road, from the mining site to a shipping terminal near the city of Toliara, would traverse a protected area called Ranobe PK32, raising conservation concerns. The “encroachment” of the road on the protected area poses environmental “risks,” the court concluded.
The protected area directly abuts the mining concession, also called Ranobe, to the south and east. Made up of spiny forest atop reddish sands, it was one of many mixed-use protected areas established in the 2000s as part of then-president Marc Ravalomanana’s “Durban Vision,” an initiative to more than triple Madagascar’s protected areas. Along with Mikea National Park, roughly 60 kilometers (37 miles) to the north, it’s the only home to many reptile and bird species, including the long-tailed ground roller (Uratelornis chimaera) and the subdesert mesite (Monias benschi).
WWF, the international conservation NGO, managed Ranobe PK32 for eight years but gave up its duties in 2016 due to lack of funds. The environment ministry now manages the site, which became a fully fledged, permanent protected area in 2015.
The mining road would, at least in principle, be private, with traffic limited to company activities. Ninety-ton, triple-trailer trucks would run from the concession to the terminal 12 to 13 hours a day, seven days a week, according to Base Resources.
There’s some concern that the road could facilitate access to remote parts of the protected area. In practice, the Malagasy public tends to use paved private roads; even if automobiles can’t access them, new roads change local economic and environmental dynamics, connecting people to certain land resources and dividing them from others, Nanie Ratsifandrihamanana, WWF’s country director, told Mongabay in an email. The road also threatens to fragment spiny forest habitats, she said. Ranobe PK32 already faces severe deforestation due to shifting agriculture and charcoal production, according to two Malagasy scientists who’ve worked there.
The court’s third main finding was that the government had failed to respect the land rights of local people in granting Base Toliara permits without the permission of landowners. “The Court notes that the land rights of traditional occupants have been ignored,” the report says. “The Court finds that no contract has been signed and no authorization has been issued by the holders of land rights to [Base Toliara].” It adds the company “should have immediately entered into contact with the holders of land rights to negotiate the terms of a lease contract.”
Finally, the court found that regulators did not sufficiently consult with local people, local government authorities, and civil society groups before issuing permits.
In 2014, a committee led by the National Office for the Environment (ONE) conducted a public consultation, finding that more than 80% of local people supported the mining project. But the court’s auditors, after examining the 2014 documents, found that many local people supported it only with conditions that they were careful to put in writing at the time.
The auditors, who visited the site in preparing the report, found that many local people don’t understand the breadth of the project. “The local population is not even aware of the purpose, the issues and the impact of the project,” the report says. “One can say that the result of the public consultation does not reflect the reality on the ground.”
Base Resources’ communications manager, James Fuller, told Mongabay that the main objective of the audit was assessing governance issues, and that the court had not formally provided the company a copy of the report. The ONE and the mining ministry declined to comment for this story. The environment ministry did not respond to a request for comment. (The Court of Auditors report is not available online but Mongabay obtained a copy.)
A suspenseful suspension
Madagascar’s government will at some point have to decide whether to lift the suspension or end the project. It’s not clear how much the Court of Auditors report will influence the decision, as this is the first such report the court has issued about a mining project. For local people and the company, there is much at stake.
Base Resources considers the Ranobe concession to be one of the best mineral sands deposits in the world. The company’s only other asset is Base Titanium, a profitable mineral sands project in Kwale county in southern Kenya that is nearing the end of its productive life. In Kwale, some local people have objected to the public health impact of the project and opposed a proposed expansion.
The Ranobe concession in Madagascar would operate for decades and would generate about $250 million in revenue per year, company documents indicate.
“We’re pretty excited about it, simply because the ore body is like Kwale times 10, in terms of scale, and very high grade,” Tim Carstens, Base Resources’ managing director, told Mining Review in August.
In interviews and company statements, Base Resources executives have framed the Madagascar government’s suspension of its activities as a matter of fiscal negotiation. Yet when the government announced the suspension last November, its own press release highlighted a different reason: “This is due to the incidence of violence and conflict with host communities in the project areas.” Last year, a group of about 40 local people opposed to the project vandalized and burned a Base Toliara campsite. Fuller, the company’s communications manager, did not respond to a question on this subject.
Critics from civil society groups say the company has not abided by the suspension, which specifically forbids all communications related to the project. Since the suspension, Base Toliara has put out job announcements on social media and donated to COVID-19 relief efforts, which led to positive media attention. The critics say these violate the government suspension and the company is using the pandemic to launder its reputation. However, Base Resources says it has followed the government order.
“Base Toliara continues to abide by the Government’ suspension of on-the-ground activity and of all communication about the project,” Fuller wrote.
In the background of the Base Toliara debate is a larger one over the Malagasy mining code. Civil society groups say the current code, which dates to 2005, has insufficient social and environmental protections. Meanwhile, many government officials want to increase revenues for the state — the current royalty rate for mining projects is 2%, which is low by African and international standards.
Andriamanantenasoa, the CRAAD-OI program director, said the mining ministry has included civil society groups on a steering committee aimed at reforming the code, and added she’s hopeful that parliament will pass a new code with stronger protections in 2021.
Judging from the contents of the Court of Auditors report, that would only be half the battle; it’s hard enough to enforce the social and environmental protections already in place.
Banner image: A long-tailed ground roller (Uratelornis chimaera). The species is restricted to the area near Base Toliara’s proposed mine site. Image by Frank Vassen via Flickr (CC BY 2.0).
Clarification 10/14/20: This article has been amended to clarify that the Madagascar-registered company that possesses the permit to mine in Ranobe changed names from Toliara Sands to Base Toliara in 2018, following its sale from one Australian corporation, World Titanium Resources, to another, its current owner Base Resources.
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