MADAGASCAR Law and Practice Contributed by: Herisoa Raharimamonjy and Mialy Solofohery, John W Ffooks & Co
5.4 Sources of Finance for Exploration, Development and Mining The main sources of finance for exploration, development and mining in Madagascar include the following: Private Investment Domestic and foreign direct investment (FDI): Private investors and multinational mining com - panies are major sources of funding for explora - tion and mining activities. Madagascar’s 2023 Mining Code and Investment Code encourage foreign investments by offering incentives such as tax reductions and guarantees against expro - priation. Mining Royalties and Partnerships Public-private partnerships are commonly formed between the government and private entities for mining projects. Mining royalties con - tribute to the funding of exploration and devel - opment phases. International Financial Institutions Organisations like the World Bank, the African Development Bank (AfDB), and other develop - ment banks provide loans and grants for mining projects that promote sustainable development and environmental management. For example, Madagascar’s involvement in the EITI supports transparency in resource management, increas - ing confidence among international 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 securi - ties market dedicated to mining finance, unlike countries with established mining exchanges like Australia and Canada. However, interna - tional 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, min - ing tenements and related assets can be used as collateral to secure financing for exploration, development and mining activities. The law explicitly allows the creation of security interests over mining rights to facilitate financing, provid - ed such arrangements comply with the regula - tions issued by the BCMM, which administers mining permits. 6. Mining: Outlook and Trends 6.1 Two-Year Forecast for the Mining Sector The new Mining Code focuses on the improve - ment of investment and activities in mining rather than the environmental aspect. Therefore, initiatives towards energy-transition minerals or carbon net zero are not included in the Code. With that said, the new Mining Code still dedi - cates an entire chapter to environment pro - tection, detailing the requirements that mining licence holders must adhere to. In addition, Interministerial Order No 12032/2000, relating to environmental protection regulations in the mining sector, includes provisions regulating conflicts between the impact of mining projects and environmental protection. As the current legislation regulating the mining sector (ie, the new Mining Code and its imple - mentation decree) represents the latest legis - lation (updates in 2023 and 2024), there is no expectation of any imminent changes.
288 CHAMBERS.COM
Powered by FlippingBook