A controversial minerals mine in Fort Dauphin, Madagascar, could serve as a model of green capitalism while helping the economic development of one of the world’s poorest countries.

The government of Madagascar issued Rio Tinto’s Canadian subsidiary, QIT Fer et Titane (QIT), with an environmental permit in November 2001 with a document obliging it to comply with social and environmental rules.

“Mining can be done in a responsible manner in a way to contribute to the environment and economy,” said Daniel Lambert, president of QIT. The investment is worth about $350m and the mine is expected to begin functioning in December 2005.

Rio Tinto has been investing up to $1m per year in the project since 1986. This includes providing a dedicated team of 50 people to resolve complex social and environmental challenges and ensure mining is carried out in compliance with the wishes of the locals and the authorities.

Environmental projects include the establishment of three conservation zones and the annual planting of fast growing, non-invasive species of tree to provide a sustainable source of firewood for the local people.

A micro credit scheme offering loans to villagers has been successfully initiated to enable the development of commercial and cottage industries. There are also projects to support health and education.

Mr Lambert expressed concerns about the adequacy of the local port and said the building of a large deep-sea public port was “an important tool to stimulate the economy”.

Of the 170 people employed on the project, only three are not locals, said Mr Lambert. He estimated that once the project was running, it would create 600 direct jobs and about double that in indirect jobs. “Rigorous training programmes will also be in place to maximise local hiring, and town planning exercises by Fort Dauphin have been arranged to limit speculative migration and allow organised development,” he said.

QIT and the project have come under fire from international non-governmental organisations (NGOs) for negotiating to pay 2% tax on the value of the mining operation while other foreign mining companies in Madagascar pay 5%. Due to the fragile nature of Madagascar’s forests, this is a particularly sensitive issue to environmental NGOs.

Mr Lambert insisted that “consultation with the locals and the authorities has been an integral part of the project from the beginning” and that careful planning will help to limit environmental damage.