Source: Reuters

By Tim Cocks

ANTANANARIVO, Nov 26 (Reuters) - Madagascar's ministries of environment and mining have cut a deal that will allow some mineral projects into environmentally sensitive areas of the island's remaining wild forests, the environment minister said on Friday.

Though largely unexplored, mining experts think the world's fourth-largest island has big untapped reserves of minerals, including nickel, sapphires, rubies, aquamarine, gold, platinum and bauxite.

Exploiting those reserves is a key part of Madagascar's plan to fight poverty, but the government has also worked to preserve its bounty of unique wildlife, which brings tourists into the cash-starved nation.

Several proposed mining projects have drawn criticism from environmentalists who fear it would involve tearing up more of Madagascar's already-dwindling forestland, where many of the island's 200,000 species live. Nearly three-quarters do not exist outside the island.

"Because of this we have worked closely to reach an accord with the ministry of energy and mines," Environment Minister Charles Sylvain Rabotoarison told Reuters.

"The trick will be to put the pledge into action while respecting that in and around the protected areas, we also have quite a wealth of mineral resources."

The ruling delimits exactly where mining projects that might encroach on sensitive areas can go, although he did not specify which areas are off-limits to extractive industries.

Nonetheless, it is a positive sign for miners who have concessions in sensitive areas, like Rio Tinto's <RIO.AX> proposed titanium mine and Dynatec's <DY.TO> nickel project.

Environmental impact studies are underway for Dynatec's concession, while observers say Rio Tinto is in no hurry to start its mine lest its new production depress titanium prices in the region.

President Marc Ravalomanana last year delighted conservationists when he pledged to increase Madagascar's protected nature reserves to 6 million hectares from the present 1.7 million.

But the political will now is enough to reach a compromise, Helen Crowley, country representative of the New York-based Wildlife Conservation Society, told Reuters.

"There's a two-year freeze on mining concessions in sensitive zones. Existing concessions are subject to stringent impact studies. It's looking positive," she said.

Analysts say most of Madagascar's rainforest cover is being diminished as impoverished farmers cut it down to clear land for planting subsistence crops. Madagascar also has some oil concessions, another target of environmentalists, but all of those are offshore.