China, the non recognized HAT’s first partner

The HAT Asian economic strategy capitalized into one first official contract. The ministry of Mines granted to the Chinese WISCO (Wuhan iron and steel corporation) the rights to exploit the iron fields of Soalala. It has come true on May 08th, 2010. The decision has been officialized following the Chinese development and reform commission, on May 25th.  

The HAT tilted into the jackpot, and may boast a successful attraction of twice more investments than what is being returned by biggest on going project in Madagascar. Wisco is planning to inject 8 billion of dollars in the Soalala project. The prospection phase dimmed to extend up to 2012 would be returning some 2 billion US dollars. The interest is a godsend for the authoritarian regime since state accounts will be filled up with twice 50 million US dollars in a week.  

This signature is a cause for concerns within the business as well as within the diplomatic spheres. The authoritarian regime is not internationally recognized. Long before its eluding birth, the consensual transition wanted by the international community is ordered to ignore the deal. The HAT decision is “unilateral” for not having been validated by the national assembly previously erased by Andry Rajoelina some days after his rise to power.   

The Chinese business company is somehow daring the odds by signing with the HAT, actions of which are more than legally controversial. Instead of making a clean sweep on the deal, Madagascar’s next legitimate government could address the mining contract’s terms anew when the prospecting phase is completed. In order to seduce the people, the HAT lays the transparency card on the table, and boasts the potential returns: 600 million US dollars, plus 280 million US dollars of royalties per year.  

Wisco presents an attractive file when accepting to transform a share of the production prior to export. The first iron extractions are meant to come true 2014. The project is offering the construction of large industrial facilities with factories as well as homes for a cost of 1.2 billion US dollars. The export of steel bullets is being expected to come true in the year 2019.  

As emulating both other multinationals making business in Madagascar, Wisco is going to build a harbor whose cost is being rated to 4.3 billion US dollars, and a power station for 1.8 billion US dollars. The Soalala project could create some 100 000 jobs.  

The 400 km² wide Soalala field related bid was made public by Madagascar’s latest legal government in 2008. In the run of the government’s unconstitutional change, the issue was left on stand by. In September 2009, the HAT government decided to suspend the mining exploitation authorizations distribution. Wisco is the ever first business company to benefit from the suspension’s end. China is more than ever in pole position to make a clean sweep on Madagascar’s mining contracts. Peking doesn’t give a damn about democratic principles, and would even be keen on pulling advantage from the political situation to stretch its financial influence. Besides, the HAT is desperately straining to break its international isolation by selling national wealth out to whoever is eager to pay for them.