Madagascar’s government lifted its 16-year ban on issuing new mining permits last week with the exception of gold due to current regulatory challenges with artisanal mining.
State officials imposed the moratorium in 2010 as part of their overhaul of governance and legal frameworks in the sector.
“Mining permit is an essential working tool that allows operators and investors to operate legally,” Minister of Mines Carl Andriamparany stated at a press conference Thursday. “That is why we have decided to lift the suspension on issuing permits,” he added.
According to the nation’s latest Extractive Industries Transparency Initiative report published late last year, there are currently 1,650 mining permit applications pending. Stimulating the local economy is the aim of the decision to begin processing them. In recent years, it has been plagued by significant challenges. Poverty is highly prevalent in Madagascar with 70 to 80 per cent living below international lines.
Tapping into the Island’s rich nickel, cobalt and graphite deposits could help bring significant relief despite environmental implications.
The news has captured investor attention amid heightened demand for commodities like these. Billions worth of investment could potentially be unlocked as new projects are permitted and shovels hit the ground.
“We are very grateful for all the long hours and hard work that went into achieving this important milestone for Madagascar,” commented Wilhelm Reitz, General Manager at local graphite mine operator NextSource Materials Inc (TSE: NEXT) (OTCMKTS: NSRCF) (FRA: 1JWA).
Read more: NevGold Corp. advances toward gold-antimony resource with expanded Nevada drilling
Companies with stalled operations should be pleased
Energy Fuels Inc (NYSE: UUUU) (TSE: EFR) (FRA: VO51) is poised to benefit from the repeal. The American uranium and rare earths miner owns Madagascar’s Vara Mada Project — an operation that stalled in 2019 amid negotiations. Lifting the ban will enable resumption of technical and environmental work, potentially leading to a financial investment decision in early 2026. This site is focused on titanium, one of the nation’s top exports, along with minerals such as ilmenite, rutile and zircon.
Additionally, Thailand-based PTT Public Company ADR (OTCMKTS: PUTRY) stands to gain from the development through its subsidiary PTT Asia Pacific Mining and its Sakoa Coal Project in Madagascar. Operations stalled at the site in 2012 due to the permitting renewal prohibitions.
Other beneficiaries may include companies targeting nickel and cobalt expansions, such as Sherritt International Corp (TSE: S) (OTCMKTS: SHERF) (FRA: HRT) and Sumitomo Corp (OTCMKTS: SSUMF) (FRA: SUMA), who are partners in existing operations. Most notably, the Ambatovy nickel-cobalt mine, the nation’s largest mining project. It produces up to 60,000 tons of nickel and 5,600 tons of cobalt per annum.
Moreover, graphite-focused investors could also surge in, drawn by opportunities linked to battery anode materials. Mining currently employs more than 800,000 people nationwide and that number is now set to increase with more operations coming online.
This repeal positions Madagascar to expand its role in global supply chains for critical minerals. Firms with pending applications or stalled projects will likely see accelerated development, attracting foreign capital and enhancing stock values.
Read more: NevGold’s latest discovery represents near term antimony production potential
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