Madagascar revives Vara Mada mining project as key investment awaits approval
Madagascar's largest mining venture – dormant for more than two decades – is gaining momentum once again. Formerly known as “Base Toliara” and rebranded “Vara Mada” in December 2025, the project aims to extract strategic minerals including ilmenite, zircon and monazite.
Backed by the United States and led by US company Energy Fuels, the revamped Vara Mada project could operate for up to 38 years in Madagascar's impoverished south-west.
The final hurdle now lies in securing a formal investment agreement with the Malagasy government – a document that will need to be made public and approved by both the Constitutional High Court and Parliament before work can begin.
Located in Ranobe – around 45km north of the southwestern city of Toliara – the Vara Mada site represents an investment of about €854 million.
Its primary focus is monazite, a mineral rich in rare earth elements that are essential for modern technologies ranging from electronics to renewable energy systems.
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Rebuilding trust
China currently supplies close to 80 percent of the world's rare earths, making alternative sources highly strategic. By tapping Madagascar's reserves, Vara Mada could help diversify supply chains – an increasingly important goal for Western economies.
Despite its promise, the project has had a turbulent history. First explored in the early 2000s, it has passed through several owners and undergone multiple rebrands without ever reaching production. In 2019, it was suspended following strong local opposition and social unrest.
Energy Fuels says it is determined to turn the page. Senior vice president Mike Van Akkooi has acknowledged past shortcomings, emphasising a renewed focus on transparency and dialogue with local communities.
The company, he says, wants to rebuild trust and ensure that residents fully understand both the opportunities and the risks.
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A balancing act
At the heart of the revival effort is the pending agreement with the Malagasy authorities. Described by the company as an “employment contract”, it will define the full framework for the investment.
This includes a stability clause – ensuring that agreed terms remain in place throughout the life of the project – as well as provisions for international arbitration in case of disputes.
If approved, the economic impact could be substantial. During the construction phase alone, Energy Fuels expects to inject more than €427 million into Madagascar's economy – a figure it says would twice exceed the country's current levels of foreign direct investment.
The timeline is ambitious – construction could begin as early as 2027, with production targeted between 2029 and 2030. For a region that ranks among the poorest in Madagascar, the project promises jobs, infrastructure and a potential economic boost.
Yet enthusiasm is far from universal. In the deep south of the country, the project remains controversial, with some residents and activists continuing to voice concerns over environmental damage and potential health risks.
As Vara Mada edges closer to a reality, Madagascar finds itself balancing significant economic opportunity against the need for environmental safeguards and community trust – a familiar challenge in the global race for critical resources.
This article has been adapted from the original version in French by Sarah Tétaud.