Akora Resources Ltd (ASX:AKO) has welcomed the finalisation of a replacement Mining Code in Madagascar, describing it as a “positive step” for mining in the country.
Madagascar’s President Andry Rajoelina has signed the replacement Mining Code, which has been registered by the Secretary General of Government.
Changes applicable to Akora’s iron ore projects in the country are:
- 5% Mining Royalty;
- 3% Social and Community Mining Investment fund, based on each project’s capital cost; and
- 20% Company Tax rate.
“A positive step”
Akora Resources managing director and CEO Paul Bibby said: “Having the replacement Mining Code signed off by the Government and the President of Madagascar is a positive step for exploration and mining companies and investors.
"We now wait for the implementation rules to be published to understand the procedures that need to be managed to progress our projects.”
About Akora
Akora Resources is an exploration company engaged in the exploration and development of the Bekisopa, Satrokala, Tratramarina and Ambodilafa projects, all iron ore prospects in Madagascar where it holds 308 square kilometres of tenements across these three prospective exploration areas.
Bekisopa is a high-grade iron ore project with a strike length of about 6 kilometres and an inferred resource of 194.7 million tonnes.
This project has outcropping and weathered zone DSO iron ore and potential to produce a premium grade +68% iron concentrate suitable for Direct Reduced Iron (DRI) pellets for the 'Green Steel' future.
Mining Code update
This update has resulted from the Malagasy Council of Ministers approving the Ministry of Mines and Strategic Resources to resume processing applications for all mining permits on March 30, 2023
It sees the Mining Royalty in Madagascar increased from 2% to 5%, which compares favourably to iron ore royalties in other countries, including 7.5% in Australia, 3.5% in Brazil and 15% in India.
The updated code also introduces a new 3% Social and Community payment, based on the initial capital expenditure amount.
For a proposed staged development at Bekisopa, the management of this fee will be considered as the project progresses from Direct Ship Ore (DSO) production, to producing a high-grade very low-impurity iron concentrate, for ‘Green Steel’ DRI pellets.
The tenement tenure has also been modified, bringing the duration in line with standard industry practice across other active mining jurisdictions.