Madagascar is Africa's leading graphite producer. Its Ambatovy nickel and cobalt deposits rank among the world's largest. Its rare earths are coveted by energy-transition industrialists. Yet the island imposes no local processing requirements. The result: value-added leaves the country.
Graphite, Nickel, Cobalt: Staggering Volumes
In 2024, Madagascar produced 85,000 tonnes of graphite (2025 estimate: 80,000 tonnes). The Molo site, operated by NextSource Materials, has a capacity of 17,000 tonnes per year, currently running at 11,000 tonnes. The Ambatovy complex can refine up to 40,000 tonnes of nickel and 4,000 tonnes of cobalt annually — capacities that have been underused for several years.
The Vara Mada project adds another dimension: 959,000 tonnes of ilmenite, 66,000 tonnes of zircon and 24,000 tonnes of monazite per year over a 38-year mine life.
The NextSource Paradox: $291 Million Invested… in Abu Dhabi
That is where the problem lies. NextSource Materials, operator of Madagascar's graphite mine, chose to invest $291 million in a battery anode plant — essential to the electric vehicle value chain. Location chosen: Abu Dhabi. Not Antananarivo, not Toamasina. The same logic applies to rare earths: oxide processing takes place at the White Mesa facility in Utah, USA.
Why? Madagascar 'imposes no local transformation requirements,' according to industry experts. In a global race for critical minerals, the island risks remaining an open-pit mine while regional competitors — Zimbabwe, the DRC — experiment with stronger local content policies.
Why It Matters
Critical minerals are at the heart of the global energy transition: batteries, solar panels, electric motors. Madagascar sits on an extraordinary resource base. But without an industrial policy that forces investors to process on-site, the island will remain a raw material exporter while value — and jobs — are created thousands of kilometres away.