REPORT OF THE INTERNATIONAL ADVISORY PANEL

August 2011

The Mining Project

Regarding the mining project itself and in contrast with one year ago, the situation is positive and encouraging. Technical difficulties have been addressed, production targets attained, the overall operation is moving towards full production and financial contributions provided from the project to national, regional and local development in the form of royalties, taxes and ristournes are rising steadily.

As the first large-scale mining project in Madagascar, the project is committed to setting the standard of social and environmental stewardship for future industry projects. This is especially important, given rapidly increasing International interest in the country’s extensive mineral resources and resulting increases in mining rents. But with this also comes a growing risk of an unlevel playing field, as sound institutions fall victim to short-term rent seeking interests of elites. Some recent evidence gives reason for concern over serious damage to the institutional framework Madagascar established in the early 1990s to ensure transparent management of mining rights and permit management, full social and environmental impact assessments, transparent revenue collection and independently measured accountability. This institutional framework depends on government regulation and enforcement and not a matter that and private company can itself resolve. Nevertheless, QMM can and should support the building of a broad-based coalition of mining companies, civil society and the public to advocate and increase public awareness of the importance of transparency and a level playing field in mining governance.