The mining group is refocusing on iron, aluminium, lithium and copper while placing other activities, including titanium, under strategic review, raising questions about the long-term future of its ilmenite project in Madagascar.

Mining giant Rio Tinto plans to raise between $5 billion and $10 billion by reviewing and divesting parts of its asset portfolio, with the goal of selling operations deemed non-strategic or insufficiently profitable. The announcement, made last week, is part of a restructuring begun in August, but it is not yet clear what this means for the future of an ilmenite project run by the Australian group in Madagascar.

This divestment policy is part of a broader refocus on three key activities: iron, aluminium and lithium in one division, and copper in another. This organisational structure will allow Rio Tinto “to reach new standards of operational excellence and value creation,” the company said. Several activities, including those related to titanium, “will fall under the commercial director’s remit for strategic review.” Titanium is obtained by processing ilmenite, which the company produces at its QIT Madagascar Minerals (QMM) unit near Fort-Dauphin in Madagascar’s Anosy region.

A strategic and conflict-ridden asset in Madagascar

Since 2005, Rio Tinto says it has invested more than $1 billion in its operations in Madagascar, while spending more than $100 million on community development. The Australian group holds an 80% stake in QMM, with the Malagasy state holding the remaining 20%. Antananarivo and Rio Tinto signed a new agreement governing the operation in August 2023. It includes an increase in the royalty rate paid by QMM to 2.5% from 2%, as well as Rio Tinto financing rehabilitation work on National Road 13.

Rio Tinto also committed to double its annual contribution to fund development programmes for local communities. Despite these commitments, the relationship between Rio Tinto and local communities remains tense, largely due to concerns over QMM’s environmental impact. In 2024, for example, British law firm Leigh Day filed a complaint against the Australian group in the United Kingdom on behalf of villagers living near the mine.

They accuse the company of contaminating local waterways, allegations that have previously led to violent protests in 2023 and which Rio Tinto has consistently denied.

A difficult market and political climate

While these tensions persist, the restructuring undertaken by Rio Tinto has renewed attention on the future of QMM. When announcing the plan in August, local company officials on the island told local media outlet L’Express de Madagascar that it would entail no changes to QMM’s activities. Contacted on the matter by Agence Ecofin following the announcement of the upcoming divestment of some assets, Rio Tinto did not respond.

Whether the future of this ilmenite production unit ultimately aligns with Rio Tinto’s long-term strategy or not, several factors warrant close attention, including the local political context. Following the October 2025 coup against the regime of Andry Rajoelina, who signed the agreement with Rio Tinto in 2023, Colonel Michael Randrianirina has emerged as the country’s new strongman. His regime says it wants to “restore trust between the state, investors and the community,” but has not yet commented on any potential changes at QMM.

These political uncertainties are compounded by an unfavourable market environment. Rio Tinto faces slowing global demand in the titanium dioxide market, a product the Australian group produces by processing Malagasy ilmenite in Canada. In its third-quarter 2025 report published last October, Rio Tinto said demand in key downstream titanium dioxide sectors remains moderate.

Market specialists share that view. “We think there is about 18 months of inventory in the channel, so it's about three-quarters too many. So we are concerned from a broader perspective that it could be not until the summer of 2026 before demand really starts to pick back up,” said Chris Olin, managing director of Northcoast Research, quoted two months ago by price reporting agency Argus.

Between a sluggish market and an unstable political climate, the group’s final decision on QMM will depend on the outcome of the commercial director’s review.

Emiliano Tossou