Features

After over 20 years of exploration, planning, negotiation and collaboration, Rio Tinto is bringing to fruition the biggest ever infrastructure project in the history of Madagascar.

The start of 2009 has seen a significant milestone for a major Rio Tinto project. After years of challenges and sustained development, the first tonne of Madagascan ilmenite now lies within a growing stockpile at the QIT Madagascar Minerals (QMM) project.

Located near the once sleepy town of Fort Dauphin, on the east coast of Madagascar, the QMM mineral sands operation has started production and is nearing the completion of its construction phase. The development is owned 80 per cent by Rio Tinto and 20 per cent by the Madagascar Government.

The first ilmenite exploration was undertaken in the late 1980s by Rio Tinto subsidiary QIT (Quebec Iron and Titanium), establishing the presence of a significant mineral sands deposit around Fort Dauphin. At the time there was almost no existing transport infrastructure in the region, with a degraded road network and run down port facility the only significant features in a deeply rural landscape. Understanding the area's mineral potential, Rio Tinto sponsored a far reaching regional development plan, and embarked on extensive social and environmental impact assessments (SEIAs).

Jean Giroux, mine manager at the QMM project, first visited Madagascar as part of the original QIT geological team in 1986, and worked on the assessments between 1989 and 2001. He marvels at the difference from the early days, when the region was less developed and had yet to undergo its dramatic period of growth.

Jean also remembers taking news of the project to the outlying villages of the region, to consult with local communities.

"We made an effort to introduce the project in a way that related to them - instead of Powerpoint presentations we took drawings by a local artist, as well as small scale models of the area and the mining equipment.

"On one occasion, we presented at a village where a small sand mining operation had been located in the 1950s.

Within minutes of starting, the village's traditional leader stood up and asked to speak. It turned out that he had worked on the early sand mine, and he took over our presentation, proudly explaining the details of dredge mining work.

"He and I exchanged details, and we met again during the inauguration of a QMM supported conservation zone in his area. It's a meeting that I will always remember - I've promised him a personal tour of the mine." Construction and employment projects have brought a range of benefits to the area. The scale of construction has been immense - a new haul road network has been developed, in constant use by locals, and an extensive port facility at Ehoala will replace the existing Fort Dauphin port this year. Some figures give an idea of the scale of construction - 850,000m3 of material have been dredged to give shipping clearance, whilst over three million tonnes of rock have gone into the construction of the quay and the 625m breakwater.

"The new haul road from the port to the mine is probably the best tarred road in the country," says Chris Beaumont, general manager for construction. "The biggest challenge so far has been logistics - bringing pontoons from China, generators from Finland, spirals for the separation plant from Australia, consolidating them with other equipment in South Africa, and bringing them in via the old Fort Dauphin port.

"I have particular memories of bringing in the pontoons - we consulted with the local residents for months, to tell them how big these pontoons were, and how difficult it would be to move them through the streets. We did it at 11 pm, assuming that it would be quiet.

"When we started, 30,000 people came out to watch us, and they stayed for all 16 pontoons. The next day one of the local residents told me that 'a dream had come true', and they now knew that the mine would be built." It is not just infrastructure development which has brought benefits to the area. A comprehensive recruitment drive brought more than 3,500 Malagasy employees on site during the construction phase, greatly exceeding the SEIA estimate of 600. Further recruitment and training has begun to develop the skills of the 530 strong QMM workforce, 476 of whom are Malagasy. The training has paid dividends, particularly in adherence to Rio Tinto safety standards - 12 million man hours have been worked over 14 months, with no lost time injuries.

Francois Godin is the general manager of operations, and has been developing the future operating organization. "The training programme was built on the principle of 'learning by teaching'. We gave more than 12,000 man days of training to our people, and sent the operators to Richard's Bay Minerals for practical experience.

"We've also recruited as far as possible from construction employees already on site, to minimize the negative effects of demobilization." These achievements, and others, represent the biggest investment project in Madagascar's history. Gary O'Brien, president and executive director of the QMM project since 2002, has a view of the bigger picture. "We recognized that for the project to be a success in the long term, we needed the support of government and international donors like the World Bank (the developments represent part of the Madagascar "growth poles" project, funded by the World Bank).

"We've actually signed an agreement directly with the World Bank, which is a rare privilege as it usually only deals with governments." On the ground this means that QMM will contribute US$110m towards the new port, in addition to a US$35m loan from the World Bank. The port is intended to be a multi user facility, with ownership eventually passing to the national government. Beyond the port, a 400ha industrial zone will be developed to attract further investment, whilst QMM has also undertaken major projects in collaboration with the government to provide clean water and power to the region.

In addition to a strong environmental programme (see page ten) which has set aside tourism conservancy areas, the project stands to bring further growth to the region's economy.

"A number of high quality hotels have opened since the project's inception, and over 300 new businesses have registered in the area since construction started," says Gary. "There's also no doubt that this project has put Madagascar firmly on the map of foreign investors. I don't think the country would have seen such activity if we hadn't started the project in 2005." Ny Fanja Rakotomalala, deputy general manager of Operations, agrees with Gary.

"We can already see significant changes around Fort Dauphin. In due course the economic activity of the whole area will be raised, with knock on effects for education, health, and poverty reduction." Ny Fanja is QMM's longest serving Malagasy employee, with over ten years' experience on the project.

Production has started, and 2009 sees the first exports through the new port, destined for smelting facilities at QIT in Canada. The benefits to Rio Tinto are immediately obvious - the operating mine will annually produce 750,000 tonnes of high grade ilmenite and 40,000 tonnes of the combined mineral product ZirSill, from the initial Mandena site - plans are in hand to expand mining to sites at nearby St Luce and Petriky. At this level of production, QMM will form a significant part of Rio Tinto's titanium dioxide portfolio, producing approximately 15 per cent of total company output.

It's been a long road from 1980s exploration to 2009 production at QMM.

Despite many difficulties, the project has proved a success for Madagascar and Rio Tinto, as it now moves into its operating phase. Says Jean Giroux: "It will be quite emotional for me, after 23 years of involvement, when sometime soon a ship will leave with ilmenite from the new Port of Ehoala."