Announcement of the World Bank Supports Improvements in Madagascar’s Mining Sector on May 14, 2003

The World Bank Supports Improvements In Madagascar’s Mining Sector Media Contact: Eric Chinje Tel: (202) 458-8418 Email:Echinje@worldbank.org Washington, May 14, 2003 – The World Bank’s Board of Executive Directors yesterday approved a $32 million IDA credit[i] to assist the Government of Madagascar implement its strategy to accelerate development and reduce poverty through strengthening governance and transparency in the management of mineral resources -- with an emphasis on small-scale and artisanal mining. “This project will address Madagascar’s undiscovered geological potential, and its widely used but inefficient small scale mining methods that unnecessarily damage the environment, and enable mineral production to be smuggled out of the country with little fiscal and economic benefits,” said Paulo De Sa, Task Manager for the project. The Mineral Resources Governance Project will be implemented by the Ministry of Energy and Mines (MEM) over the next five years and is divided into four components: First, support measures that aim to improve governance in the management of mineral resources and reduce the smuggling of gemstones by: adjusting the mining sector’s legal and regulatory framework; supporting the establishment of mining administration offices close to the exploitation sites; establishing a certification program for gemstones; creating a one-stop shop for gemstone exports and a gemstones exchange; and strengthening private sector associations. Second, support the Government’s decentralization strategy to transfer competences to the municipal level and to empower local communities, particularly by training professionals. This component will also sponsor a communication campaign geared to raising awareness of the mining sector reform in the local communities, and set-up an Intranet and Internet network within the mining administration that will facilitate communication with all public and private stakeholders. Third, establish a Mining Sector Promotion Agency to improve the Government’s capacity to attract private sector investment by coordinating certification procedures, administering a Small Grants program, establishing a database of geological and geophysical information on the country’s mineral resources, and by designing and implementing environmental awareness campaigns. This component will also strengthen the Geo-scientific Information Infrastructure by financing a geo-physics campaign and conducting geological and geochemical mapping. Furthermore, the activities in this component will increase information to investors through the creation of a Mineral Resources Governance Database. Fourth, enable project coordination and management. Project management will build upon the existing Project Implementation Unit (UCPM) that will be responsible for project procurement, project monitoring, reporting and evaluation, financial record keeping and contractual relationships with the World Bank. The project will also coordinate with the ongoing Multisectoral STI/HIV/AIDS Prevention Project to undertake pilot activities for HIV/AIDS prevention at the commune level. [i] The credit is on standard International Development Association (IDA) terms, with a maturity of 40 years, including a 10-year period of grace.