• Talks continue on fiscal terms for the Toliara, now Vara Mada, mining project
• Updated feasibility outlines strong output and cash flow over a 38-year mine life
• A final investment decision depends on a definitive agreement with authorities

The coup that took place in Madagascar in October 2025 has not, at this stage, halted the development of the Toliara mineral sands project. This is the key message from the latest update by US-based Energy Fuels, the asset’s owner, which said it is continuing negotiations with the government on the fiscal terms applicable to the future mine.

Now renamed Vara Mada, the Toliara project is expected to deliver average annual production of 959,000 tons of ilmenite, 66,000 tons of zircon, 8,000 tons of rutile, and 24,000 tons of monazite, a source of rare earths, over an estimated mine life of 38 years. The updated feasibility study published by the company on January 8 also forecasts annual cash flows of $264 million, a net present value of $1.8 billion, and an after-tax internal rate of return of 24.9%.

“Energy Fuels and the Government of Madagascar are continuing to progress fiscal terms negotiations based generally on the previously disclosed memorandum of understanding signed by the parties in December 2024. Aspects intended to facilitate the inclusion of monazite in the project's mining permit as soon as reasonably practicable are included in the scope of current negotiations,” the company said.

Definitive agreement still pending

Following its acquisition of Base Resources in September 2024, Energy Fuels became the owner of Vara Mada. Three months later, in December 2024, the US company signed a protocol of agreement with the Malagasy government, then led by President Andry Rajoelina. Under the agreement, Energy Fuels was expected to make several payments, including $80 million to support social projects in the country. The protocol also provided for a 5% royalty on production from the future mine.

In return, the authorities committed to supporting the “rapid” development of the project, including by facilitating the delivery of the required permits. However, before a definitive agreement was signed, the October 12, 2025 coup overthrew President Rajoelina and his government.

Madagascar is now led by Colonel Michaël Randrianirina. His minister of mines, Carl Andriamparany, has said the government remains “open to all operators willing to invest in the country, in order to achieve the objectives of promoting and developing the [mining] sector.” While discussions with the US company remain open, Energy Fuels said it has no guarantee that negotiations will succeed in ensuring the legal and fiscal stability of the future mine. The company plans to make a final investment decision on mine construction once a definitive agreement is reached with Antananarivo.

Emiliano Tossou