MADAGASCAR Law and Practice Contributed by: Mialy Solofohery and Tiavina Rakotonaivo, John W Ffooks & Co
ble mining practices. Foreign investors must meet these criteria to proceed with their projects. 5.3 International Treaties Related to Exploration and Mining Madagascar is a member of the Common Market for Eastern and Southern Africa (COMESA), with which the United States has an agreement to develop trade and investment relations. In 2017, Madagascar signed the Tripartite Free Trade Agreement (TFFA) in associa - tion with the East African Community (EAC), COME - SA, and the Southern African Development Commu - nity (SADC). Madagascar is one of the signatories to the African Continental Free Trade Area (AfCFTA) but is one of the few countries that has still not ratified the agreement. The AfCFTA came into force on 1 January 2021, ratified by 36 countries. According to the UN Conference on Trade and Devel - opment (UNCTAD), Madagascar has concluded nine bilateral investment treaties (BITs) – with the Bel - gium–Luxemburg Economic Union, China, France, Germany, Mauritius, Norway, South Africa, Sweden and Switzerland – and five treaties with investment provisions (the COMESA EU Economic Partnership Agreement (EPA), the COMESA Investment Agree - ment, the COMESA US Trade and Investment Frame - work Agreement (TIFA), the Cotonou Agreement and the COMESA Treaty). As a member of the African, Caribbean and Pacific Group of States (ACP), Madagascar signed the interim Economic Partnership Agreement (APEi) with the EU in January 2013 to ensure easy access to the EU mar - ket and obtain progressive tariff reductions. In recip - rocation, European goods, except certain specified ones, are now entering Madagascar without payment of any duty. 5.4 Sources of Finance for Exploration, Development and Mining The main sources of finance for exploration, develop - ment and mining in Madagascar include the following. Private Investment Domestic and foreign direct investment (FDI) – pri - vate investors and multinational mining companies are major sources of funding for exploration and min -
ing activities. Madagascar’s 2023 Mining Code and Investment Code encourage foreign investments by offering incentives such as tax reductions and guar - antees against expropriation. Mining Royalties and Partnerships Public–private partnerships are commonly formed between the government and private entities for min - ing projects. Mining royalties contribute to the funding of exploration and development phases. International Financial Institutions Organisations like the World Bank, the African Devel - opment Bank (AfDB), and other development banks provide loans and grants for mining projects that pro - mote sustainable development and environmental management. For example, Madagascar’s involve - ment in the EITI supports transparency in resource management, increasing confidence among interna - tional lenders and investors. 5.5 Role of Domestic and International Securities Markets in the Financing of Exploration, Development and Mining Madagascar lacks a robust domestic securities mar - ket dedicated to mining finance, unlike countries with established mining exchanges like Australia and Can - ada. However, international securities markets play a critical role in financing exploration, development and mining activities in Madagascar. 5.6 Security Over Mining Tenements and Related Assets Under Madagascar’s 2023 Mining Code, mining ten - ements and related assets can be used as collateral to secure financing for exploration, development and mining activities. The law explicitly allows the crea - tion of security interests over mining rights to facilitate financing, provided such arrangements comply with the regulations issued by the BCMM, which adminis - ters mining permits. 6. Mining: Outlook and Trends 6.1 Two-Year Forecast for the Mining Sector The new Mining Code focuses on the improvement of investment and activities in mining rather than the
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