The island"s two most advanced mining projects are Sherritt"s Ambatovy nickel and cobalt operation, 80 km east of the capital Antananarivo, and Rio Tinto"s ilmenite venture at Fort Dauphin in the southeast.

"Sherritt is $70-million per year starting from 2011 in terms of tax," Andry Ralijaona, presidential adviser on the environment, mines and oil, told Reuters in an interview.

"Rio Tinto is going to be more than 7,5-million per year from 2009," he said, adding that the figures could be higher if mineral prices continue to increase.

The two projects are expected to run for more than 20 years and 15 years respectively, Ralijaona said.

Located off southeastern Africa, the world"s biggest island envisages a second ilmenite project at Toliara in the south-west and a mine for bauxite, the raw material for aluminium, at Manantenina, near Fort Dauphin, he said.

Ilmenite contains titanium.

A new port being constructed at Fort Dauphin will be the Indian Ocean"s biggest in terms of capacity, Ralijaona said.

International companies like Exxon and Madagascar Oil are also looking, onshore and offshore, for oil and gas.

Madagascar Oil, a private company, says two heavy oil fields in northwest Madagascar have 9.8 billion and 2.6 billion barrels of recoverable reserves. Offshore reserves have not yet been confirmed, Ralijaona said.

Negotiation training had helped Madagascar improve its deals with the oil companies to be roughly equal to 65 percent of the value of the oil reserves, up from 52 percent in 2004, he said.

PIN/REUTERS