Ambatovy Mine: Bringing a green component to the red island

Ambatovy Mine: Bringing a green component to the red island

On a continent with an abundance of high quality mines, it can be easy to forget that the island nation of Madagascar, itself an African state, is also blessed with mining resources. Ambatovy Mine, located 80km east of Antananarivo, Madagascar’s distinctive capital, near the town of Moramanga and ideally located to reach the road and rail networks to connect it to Toasmasina, home to Madagascar’s main international port.
Few people familiar with the mining industry need any introduction to Ambatovy; Madagascar’s primary mining resource, Ambatovy is the country’s largest ever foreign investment in the country, with total FDI estimated at US$8 billion. In return for that investment, investors will gain a large-tonage, long-life nickel and cobalt mining enterprise located in a country which has ready access to the African mainland and the Indian Ocean beyond. It ranks among the largest lateritic nickel mining entities in the world.
Visitors to Ambatovy cannot help but be impressed by the scale of the operations. Ambatovy is probably the most ambitious industrial undertaking in the history of Madagascar and the surrounding Indian Ocean region. On completion, it will produce 60,000 tonnes of refined nickel, 210,000 tonnes of ammonium sulphate fertilizer and 5,6000 tonnes of refined cobalt every year for the next thirty years.

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Having a world-class asset like Ambatovy over the next thirty years will be fundamental to the development of Madgascar, where over 50% of the population is under 20 years old. The mine employs, directly and indirectly, about 18,000 people and is an industry leader in operational efficiency, health and safety, environmental management and social engagement; the exposure this generation will receive to industry leading standards will generate social dividends well beyond the expected 30-year time frame of the mine.
It’s that long-term perspective which marks out Ambatovy. Its major shareholders – Sherrritt International Corporation (40%) from Canada, Sumitomo Corporation (32.5%) from Japan, and Korea Resources Corporation (27.5%) from Korea, are all fully committed to transparent, sustainable and responsible business practices. This commitment is backed up by some of the sustainability credentials that the mine already has to its name.
Dedication to the Environment
The most strongest sustainability standards are upheld at Ambatovy, where its shareholders share their own best practices with each other to be implemented for the benefit of the project. To take just two examples of where this is the case, Ambatovy meets and surpasses the standards set out by both the Equator Principles and the International Finance Corporation (IFC)’s Performance Standards. These standards are already comprehensive and stringent in themselves. For example, the Equator Principles are ten separate principles, which cover all aspects of a company’s sustainability. These are:

  1. Review and categorization of projects, according to their size and other characteristics
  2. Environmental and social assessment
  3. Applicable environmental and social standards
  4. Develop or maintain an Environmental and Social Management System (EMS)
  5. Stakeholder engagement
  6. Grievance mechanisms, dealing with the grievances put forward by stakeholders
  7. Independent review
  8. Covenants
  9. Independent monitoring and reporting
  10. Reporting and transparency

Despite the comprehensiveness of these principles, the management of Ambatovy has extended them to implement a world-class biodiversity offsets program. This is a remarkable addition to the principles, which the firm has developed with the aim of producing positive conservation outcomes on biodiversity, and if possible, net gain.

The program set up by Ambatovy has many components and includes:
• The Ankerana offset, covering an area of 11,600 hectares (ha) of endangered forest, ensuring its long-term protection through legal arrangements, financing and community consensus.
• Two azonal forest sites, occurring over the body of the ore footprint, ensuring their long-term protection through legal and managerial commitments.
• The mine area conservation forest, covering 4,99 hectares (ha), aiming to ensure its long term conservation as part of the priority species management programme and maintenance of the ecological services for the local communities.
• The Amalamay-Mantadia forest corridor, spearheading the establishment of a forest corridor between the mine area forests and the nearby Ankeniheny-Zahamena Corridor.
• The Torotorofotsky Ramsar wetland ecosystem, aiming to ensure the permanency of legal and managerial commitments in partnership with government and local NGOs.
• The pipeline right of way reforestation programme, aiming at enhancing forest connectivity through expanded reforestation activities.
• The mine footprint replacement forest, aiming to create a replacement, multifunctional forest on the mine’s footprint.
The extent of these measures ranks among the best in terms of sustainability of any in the world today and go well beyond Madagascar. Neighboring countries with mining projects (Zimbabwe, Mozambique, South Africa and others) cannot help but to have been impressed at the measures; likewise, the fact that Ambatovy’s shareholders hail from such diverse parts of the world, suggest that they can bring home some of the takeways from Ambatovy to implement in projects in their own regions.
Enduring partnerships
The scale of Ambatovy, combined with the standards that its shareholders look to set, mean that it demands a diverse range of companies to carry out its operations. Its network of international partners have been sourced from countries such as the Phillippines (Euroasia Phillippines Ink), Germay (ARIS), the United Arab Emirates (Petropipe Dubai) and the United Kingdom (Rockwell Automation Limited and Storm Procurement UK).
On the local front, the continued expansion of the domestic economy means that several local service providers, some of them local offices of bigger international firms, have sprouted in the last number of years, both contributing to and benefitting from a project of Ambatovy’s scale. These include Societe Ocefroid Madagascar, Vivo Energy Madagascar, Main Stream Constructio and Triumph International’s local Madgascar office.
Red with hues of green
In just 20 years, Madagascar’s population has grown by over 50%, putting it inside the top 25 fastest-growing populations in the world. Historically, when countries swell at such a rate, short-term progress occurs at the expense of long-term sustainability. Thankfully, in Ambatovy at least, Madgascar can trust that the opposite will be the case. The red island, as the country is sometimes known, has guaranteed itself in this instance, to be at the forefront of green thinking. In 20 years time, when the country is hopefully benefiting from its population dividend, Ambatovy mine will have raised the bar of sustainability for companies not just in Madagascar, but all over the world.

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