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    Ambatovy Nickel Project, Madagascar

    Ambatovy Nickel Project, Madagascar

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    •  Date: 14 September 2007
    On 22 August 2007 the EIB signed a loan for USD 300m (approx. EUR 215m) to Ambatovy Minerals SA (AMSA) and Dynatec Madagascar SA (DMSA) for a  nickel-cobalt mining and processing project in Madagascar.      

    The project comprises three main elements: the construction and development of a new open pit nickel-cobalt mine approximately 80km east of Madagascar’s capital Antananarivo; a large scale hydrometallurgical refinery some 11km outside of Toamasina, Madagascar’s main port; and a 220km slurry pipeline connecting the mine and refinery. The refinery is by far the largest project component, creating important value in the country itself rather than only exporting the raw product.

    Supported by strong international shareholders (Sherritt Intl. Corp., Sumitomo Corp., Korea Resources Corp and SNC-Lavalin), the Ambatovy project will produce approximately 60 000t of nickel and 5 600t of cobalt metal per year. As such, it is one of the largest nickel mining and processing developments currently being undertaken in the industry. Moreover, the favourable geological characteristics place Ambatovy amongst the lowest cost producers worldwide.

    EIB involvement

    The EIB loan represents a significant portion of the USD 2 100m debt raised for this project with an estimated cost of USD 3780m. As well as the African Development Bank, co-financiers are the Japanese Bank for International Cooperation, Korea-Exim, Export Development Canada and a number of European commercial banks. European interest in the project is also generated as a result of demand for nickel and cobalt from EU countries. 

    The EIB contributes to the European Union's development aid and cooperation policies in African, Caribbean and Pacific (ACP) countries within the framework of the Cotonou Partnership Agreement of June 2000. The Bank’s operations in the region contribute to sustainable social and economic development and poverty alleviation, in part through the financing of private sector investments.   Financing of the Ambatovy project is therefore fully in line with the Bank’s strategy in the region, providing long-term funding that would otherwise not be available to a large “project finance” venture in an ACP country.  

    MadagascarAction Plan


    The promotion of large-scale mining, the private sector and Foreign Direct Investment rates highly on Madagascar’s development objectives. The Madagascar Action Plan (MAP) is an ambitious 5 year development plan with the aim of achieving the UN’s Millennium Development Goals and halving poverty by 2015.


    The MAP seeks to broaden Madagascar’s export base, which to-date is based almost exclusively on textiles and agro-industry. A major element of this policy is the unlocking of the country’s mineral resources. Whilst these have remained largely untouched for decades, Madagascar’s stable and business-friendly economic policy, coupled with favourable mining legislation drawn up with support from the World Bank, now opens the way for this key industry.

    Sustainable social and economic development  

    The Ambatovy mining project is already casting a positive light on economic development in Madagascar. Revenues from the project are forecast to double the 2006 level of export volumes, increase GDP by 10% and generate direct income to Government through royalties, taxes etc. Local entrepreneurs are also benefiting as the banking community is shoring up its capacities to support those who will be providing services to the project.

     Intensive project preparation and implementation of appropriate safeguards have ensured that the social impact of the project will be favourable. The project will create a considerable number of employment opportunities, with an estimation of more than 1600 direct jobs and at least 5 times as many in related and supporting economic activities. Accompanying programmes to the value of USD 300m have been integrated into the project. These will ensure development in health, safety and other social sectors, as well as improvements in local infrastructure and the creation of industrial infrastructure. 

    Protecting Madagascar’s unique environment

    Awareness of the need to protect Madagascar’s wide biodiversity including its endangered species has been carefully integrated into the project’s ten-year long preparation. A series of measures have been put in place to manage the conservation of biodiversity. These include a primary forest off-set area for the mine-site which is larger then the original and enhanced sustainable management of existing natural resources.

    A detailed, independent Environmental and Social Impact Assessment compliant with EU Directives was prepared and has been approved in early 2007 by the Office National de l’Environnement, the competent local authority. This study includes the analysis of social aspects, public consultations and a preliminary Environmental Management Plan. These documents incorporate best industry practice and comply with the environmental standards of the Bank and the EU, with the exception of the emissions from the planned coal-fired power and steam plant which will, however, be well within World Bank standards. Both the Environmental and Social Impact Assessment and the Environmental Management Plan are available on the sponsor's web-site at:

    Consultation with local communities, officials and other civil society groups formed an integral part of the project preparation. The Bank's discussions with NGOs and the international donor community focused on the need to implement suitable measures to ensure environmental and social protection. They acknowledged that large scale mining projects such as Ambatovy are, through their substantial contribution to economic development, expected to help with the preservation of Madagascar’s endangered environment by limiting uncontrolled traditional  'slash and burn' agricultural activity.

    EIB in Madagascar

    The EIB extended its first loan to Madagascar in 1970 and has been an active investor in development ever since. Financing has centred on the industrial and infrastructure sectors now totalling EUR 393m of loans signed since the start of operations in the country.

    Project summary sheets

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