BlackEarth Minerals NL (ASX:BEM)’s flagship Maniry Graphite Project is set to be a beneficiary of massive infrastructure spending in Madagascar, which will improve access and connectivity to the project and is projected to reduce transport costs.
The World Bank and the Madagascan government have signed and approved spending on major infrastructure projects totalling US$534.9 million.
“BlackEarth is pleased to see such commitments from both the Madagascan Government and World Bank,” BlackEarth managing director Tom Revy said.
“Positive investment climate”
“This proactive approach to supporting both local and foreign investment in the area is certainly a win-win for all current and future stakeholders and reinforces the positive investment climate that exists in Madagascar,” he said.
A significant portion of the funds will be used to upgrade the key proposed logistics route from the Maniry project site to the port at Tolagnaro.
The planned upgrade has the potential to positively influence both project capital and operating costs and assist with the company’s expansion plans in its third and fourth years of operation.
Road rehabilitation
The project will finance the rehabilitation and paving of a 400-kilometre stretch of road on the RN10.
“The upgrade of RN10 certainly has the potential to enhance safety on the roads as well as result in significant savings in operating (logistics-related) costs," Revy said.
“It will now provide us with the option of using both the ports of Toliara and where we have already been granted export rights, at Tolagnaro.”
Revitalising an isolated region
World Bank country manager for Madagascar Marie-Chantal Uwanyiligira said: “The World Bank has significantly ramped up its investments in the transport and connectivity sector in the past couple of years because we firmly believe that better transport connectivity is key to unlocking Madagascar’s economic and social development.”
Madagascar's President Andry Rajoelina said: “With a focus on the south, we expect this project to contribute to revitalising development in this region, which has long suffered from isolation and recurrent droughts.
“The commitment to proceed with the approved projects confirms not only the dynamism of the cooperation between Madagascar and the World Bank, but above all shows the bank's commitment and involvement in supporting our country's development.”
Watch: Blackearth Minerals' Maniry Graphite Project to benefit from infrastructure spending in Madagascar