Madagascar reopens access to critical minerals

After a 16-year freeze, Madagascar has resumed issuing new mining permits for minerals extraction. The policy shift paves the way for resource firms to tap into the island nation’s rich deposits of nickel, cobalt, graphite, ilmenite, and rare earths. However, citing ongoing regulatory hurdles, the government kept a suspension on new gold licences in place.

Since 2010, the Malagasy government has frozen the allocation of new mineral licences to allow for an overhaul of its mining laws and regulatory frameworks. This protracted pause created a significant bottleneck; by 2023, approximately 1,650 permit applications were pending with the country's mining authorities.

The policy reversal breathes new life into stalled investments and long-delayed development initiatives. A prime example is the Sakoa coal project, previously managed by Red Island Minerals, which has been paralysed for over a decade. Although Thailand’s PTT Asia Pacific Mining acquired Red Island outright in 2012 to advance the coalfield's development, Madagascar's transitional government at the time refused to renew crucial permits. Consequently, the site has seen almost no progress towards commercial extraction. Indonesia's Astrindo has since acquired PTT’s coal business.

The mining sector is responsible for more than 40% of Madagascar's total exports. The country's largest mining project is the Ambatovy nickel and cobalt mine, a joint venture between Japan’s Sumitomo Corporation and Korea’s KOMIR. Ambatovy produced around 28,000 metric tons of nickel in 2024 and roughly 2,500 tons of cobalt. To facilitate the export of these critical minerals, the Japan International Cooperation Agency is financing a massive expansion of the Port of Toamasina. As Madagascar's primary maritime gateway, the port handles roughly 90% of the nation's international cargo and serves as the direct processing and shipping hub for the Ambatovy mine.

Building on South Korea's existing presence at the Ambatovy mine, POSCO International, a Korean steel conglomerate with a growing battery materials business, has signed an agreement with Canada’s NextSource Materials to secure graphite from the Molo mine in Madagascar.

China is also moving to strengthen its position with Madagascar’s new military leadership, seeking a bigger role in developing the island’s mineral wealth. Among the largest Chinese-backed mining operations in the country is the Soalala iron ore mine, which is owned by the Wuhan Iron and Steel Corporation.

Despite unlocking the broader extractive industry, Madagascar has opted to keep its moratorium on gold mining licences intact. Officials justified the continued freeze by pointing to severe inconsistencies between the true scale of artisanal extraction and formal output records. For the past year, official data recorded just over 13 kilograms of declared gold – a figure the state concedes is negligible compared to the reality of nationwide mining activity. Given this disparity, the government acknowledged its current inability to properly regulate the sector or enforce rigorous monitoring.

Artisanal mining has also been blamed for massive environmental damage to the country's unique biodiversity.  In 2016, deposits of sapphire were discovered by unlicenced prospectors searching for gold within the protected rainforests of the Ankeniheny-Zahamena corridor in eastern Madagascar – home to many unique species at risk of extinction, including the rare indri and black and white ruffed lemur. Word spread quickly and within weeks thousands of artisanal miners arrived in the area with pickaxes shovels. The pits they dug caused substantial deforestation and threatened the endangered lemur population.

 

References

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'China enters the race for Madagascar’s critical minerals as the US expands its own push', Ecofin Agency, 27 November 2025

'Overthrow of Madagascan government complicates mining outlook', African Business, 2 December 2025

'Madagascar lifts 16-year ban on new mining permits, excludes gold', Reuters, 30 January 2026

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