Madagascar

QIT Madagascar Minerals (QMM), which is 80 per cent owned by Rio Tinto and 20 per cent owned by the Government of Madagascar, represented by the National Office of Mines and Strategic Industries(OMNIS), owns and operates a mineral sands mining project near Fort-Dauphin on the south-eastern tip of Madagascar.

History

QMM began exploring the Anosy region in the late 1980s and at the same time started preliminary social and environmental studies. In the mid-1990s QMM set up a full-time social and environmental programme.

As the first large industrial development project in Madagascar, the QMM legal and financial Framework agreement was ratified by the National Assembly in 1998. It has subsequently served as a reference for Madagascar's Large Scale Mining Law.

Between 1998 and 2001 QMM conducted a formal Social and Environmental Impact Assessment (SEIA), and in 2001 the Government issued an environmental permit for the Mandena mining site.

Rio Tinto approved the mining project in August 2005, and construction started in January 2006.

The total investment in Canada and Madagascar to complete the project was US$1.1 billion, with approximately US$940 million invested in Madagascar.

Mining Operations

The entire Fort-Dauphin deposit contains nearly 70 million tons of ilmenite, approximately 10 per cent of the world market. The ilmenite mined in Madagascar contains 60 per cent titanium dioxide, making it a higher quality than most other global sources. QMM intends to extract ilmenite and zircon from heavy mineral sands over an area of about 6,000 hectares along the coast for the life of the mine, projected as 40 years from first production.

QMM's mining operations began in December 2008, and the first ilmenite was shipped from Port d'Ehoala in May 2009. Current mining activity is located at the 2,000 hectare Mandena site, to the north of the town of Fort -Dauphin. Later phases will be located at Ste-Luce and Petriky.

QMM's mineral sands mining project involves:

• Removing the vegetation cover and storing the top soil layer where applicable;
• Extracting the sand, up to 20 metres deep, with a floating dredge;
• Mechanically separating the heavy minerals (five per cent) using spirals, and returning the silica (95 per cent) into the dredging pond for subsequent rehabilitation;
• Separating ilmenite and zircon from the other heavy minerals using magnetic and electrostatic methods;
• Rehabilitating mined areas; and,
• Transporting ilmenite and zircon about 15km to the port for export.

The ilmenite mined in Madagascar contains 60 per cent titanium dioxide (TiO2) making it a higher quality than most other global sources. The raw material mined by QMM is shipped to Rio Tinto's Fer et Titane processing plant in Canada, where it is transformed into a 90 per cent titanium dioxide chloride slag. The slag is supplied to global titanium feedstock markets and used primarily by titanium dioxide pigment producers. The pigment is used as a white finish in paint, plastic, paper and dye.

Port Ehoala

Port d'Ehoala is a multi-purpose deep-water port constructed via a public private partnership (PPP) between Rio Tinto and the Malagasy Government. In 2005, the Government of Madagascar agreed to contribute US$35 million to the establishment of Port d’Ehoala. This contribution was part of its "Integrated Growth Poles" project, funded by the World Bank.

Port d’Ehoala, a subsidiary of QMM, manages the port operations. At the end of the projected 40 year life of the mine, the port management will transfer under the responsibility and control of the Government of Madagascar. The port exports ilmenite from QMM’s operations and also services cruise liners, container ships and refrigeration vessels.

Rio Tinto and QMM work closely with the Government of Madagascar, which is a shareholder in the project, focused on five key objectives: (1) stabilize the legal framework; (2) support revenue opportunities; (3) assure good governance; (4) maintain license to operate; and (5) contribute to sustainable regional economic development. These objectives are complemented by working in partnership with other key international and local stakeholders on socio-economic, as well as critical environmental issues.