Industrial mining activities in Madagascar include the production of chromium, cobalt, ilmenite, and nickel. Small scale and artisanal mining operations, which employ over 500,000 people across the country, concern mainly gold, precious and semi-precious stones. Most of these commodities are produced and exported illegally. 

Madagascar is said to be losing millions of dollars annually to this illicit trade. The EITI process provides some visibility of the mining sector including how much gold is leaving the country and some indications of how much revenue might be being lost.

The mining code dates from 1999 and a new code is being elaborated.  This code encompasses nearly all of the mining companies in Madagascar. 

The QMM ilmenite project (a joint venture between Rio Tinto and the Government of Madagascar) is governed by the “Convention d’Établissement” and mining companies whose investment is more than 50 billion MGA (USD 16 million) are subject to the “Loi sur les Grands Investissements Miniers”.  

The upstream oil sector is governed by the Petroleum Code and by a 1997 decree, as well as by oil contracts signed between the Office of National Mining and Strategic Resources (OMNIS), the state-owned agency responsible for managing, developing and promoting Madagascar’s petroleum and mineral resources, and companies. A revision to the Petroleum Code is currently underway. 

In the petroleum sector, a one-time withholding tax of three other taxes is applied during the production phase. During exploration, the fiscal regime is that of common law, stipulated by the General Tax Code.

Madagascar’s 2014 EITI Report confirms that there is no public register of beneficial ownership in the country and that the Ministry of Commerce only collects information about shareholders. 22 companies voluntarily provided information on legal owners. In some cases, physical persons are listed as owners, but the report does not confirm whether these are beneficial or legal owners.

Project Ambatovy and Rio Tinto have significant mining operation in Madagascar, producing nickel and cobalt at the industrial scale. The artisanal and small scale mining sector is an important source of employment in the island nation. These small operations concern mainly gold, precious and semi-precious stones, which are produced and exported illegally. Information in the 2014 EITI Report estimates significant loses in government revenues due to mineral smuggling. The 2014 EITI Report does not provide data on production. 

The latest EITI disclosures (2013) show that Madagascar received USD 192 million from extractive industry taxation. Estimates show that the extractive sector contributed to 2.1% of the country’s GDP, a significant increase from 0.7% in 2012. This increase is a result of the operations of Rio Tinto and the Ambatovy mining project.