2011
AMBATOVY SUSTAINABILITY REPORT
32
Compensation was mainly related to rice fields impacted
during construction of the pipeline. Payments were made
in cash or in-kind (in the form of unmilled rice known as
“paddy”). Compensation began in 2010 and extended into
2011 due to one of the following three situations:
3
New or extra impacts caused by erosion along the
pipeline route.
3
Certain plots not identified in the 2010 survey were
found to merit compensation.
3
Outstanding compensation from the 2010 payment
schedule.
In addition, Ambatovy continued to work with the 38 families
who previously farmed in the mine footprint to ensure they
were properly compensated. They will receive new farm
land in the Ambolomaro area, located near the mine. Land
transferred will be comparable and Ambatovy will continue to
compensate for lost crops until production levels in the new
land reaches the agreed-upon output. In 2011, we completed
construction on the new land (leveling, drainage and irrigation
canals) and the hand-over will likely take place in 2012. The
hand-over will be accompanied by technical training aimed at
improving productivity.
Payments to Government
Last year, Ambatovy paid more than $30 million in tariffs,
payroll taxes and other government payments. Salary taxes
included tax paid on behalf of expatriates, which are not
factored into the payroll and benefits listed in the annual
operating costs. Expatriate salary taxes to the Malagasy
government are often paid by Ambatovy on behalf of partner
or sub-contractor companies, even if the salary itself is not
directly paid by Ambatovy. Royalty payments will commence
once production starts. In 2011, there were no fines related to
environmental or product compliance infractions.
Operating Costs
Prior to 2011, Ambatovy’s costs were primarily related to
construction and these costs were managed separately
from those for operations. The data below relates only to the
operations costs for the year in order to provide comparability
for future reports. The current investment forecast, which
covers construction and operations costs, is approximately
$5.5 billion.
2
The table below provides costs incurred in 2011, including
salaries and benefits, local procurement, taxes and
compensation payments to people whose land and livelihoods
have been affected by our activities. Royalties will not
commence until the operations phase.
Annual Operating Costs in usd*
2011
Payments to local suppliers
212,947,000
Non-strategic investments
0
Land and compensation payments
214,528
Payroll
10,612,905
Benefits
4,467,408
Salary tax
13,844,173
Land leases
250,000
Tariffs
640,108
Mining permit
233,269
Royalties
0
Taxes
15,737,342
Donations to political entities
0
Other
2,287,985
Donations & sponsoring
112,915
Total
261,347,633
* Does not include payments to offshore suppliers.
Impact Compensation
While Ambatovy has endeavoured to avoid and minimize
impacts on the homes and livelihoods of surrounding
communities, some construction activities resulted in
unavoidable losses. Compensation is being paid accordingly.
Overall, Ambatovy provided more than $214,500 in
compensation in 2011.
Economic Performance
2
Excluding finance charges, working capital and foreign exchange.
