Miners Struggling

We are concerned that foreign companies involved in Madagascar's mining sector may withdraw amid weakening external demand and depressed commodity prices. Corroborating our worries, Sheritt International said in late January that its Ambatovy joint-venture nickel project in Madagascar needs to be restructured to cope with falling nickel prices and mounting costs. The firm commented that it will seek to lower costs for construction materials, freight and labour. The threat of withdrawal poses downside risk to our growth and current account forecasts.

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