Soalala’s iron field exploitation rights: the Chinese were the single ones bound to pay

Money at any price! A precarious financial situation drove the HAT to complete a second to none event in Madagascar’s private investment history: get deposits from the contractor. It is no bribe, since the blackmail is more than official. “It is the first time that Madagascar is requiring early deposits from an investor”, recognized someone from the Trade ministry. Wisco accepted this very particular condition despised by other Asian investors. Korean and Japanese were basically interested by the Soalala project but finally pulled out as a response to the HAT’s unusual demand.  

Some 50 million US dollars have already been injected into the public treasury’s chesses. Wisco must pay the same amount anew by the beginning of June, or face up to the possible loss of its rights and its money. The HAT is allowed to be certain of the Chinese company’s committment.  This group was actually the market’s single one to have dared the odds by accepting to pay some 100 million US dollars to a non recognized government.  

Andry Rajoelina made a wish for some reflection time public before using money. According to the interviewed HAT trade ministry official, the money would be injected in the state budget, however not in the running budget but rather into the public investment’s chess. Purchasing 4WDs or materials and services would be off the point. In spite of this 100 million US dollars reprieve granted to the HAT, worries are far from over, and the money is far from replacing the eluding international support. The ministry is elaborating a strategy to use the Chinese manna.  

The ministry in charge of Energy and Mining Resources Management launched a call for bids for Soalala’s iron fields exploitation on May 22nd, 2008 through Madagascar’s Mining Land Registry Office. A list of potential customers was published three months later, but the selection process was postponed due to the country’s political crisis. The bid has been renewed in September 2009 by the overtaking authoritarian regime. By the beginning of May 2010, a international pariah transitional regime nominated the immediately generous Wisco group.  

100 million US dollars are quite a risky investment regarding the political uncertainties and the legal doubts over the nomination process. The risks would, somehow, be worthing it since 562 millions of reserve tons of iron are being rated in Soalala. Running production could reach a yearly output of 3.5 million tons per year, some 10 000 tons per day. China’s greedy need for iron and steel is certainly this daring attitude’s incentive. This commodity is nowadays very much wanted by Asian countries because of the booming large scale construction.