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WISCO keen on island's iron ore

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Wuhan Iron and Steel Co, China's third-largest steel maker, plans to start exploratory drilling for iron ore in Madagascar's Soalala region at the end of May, officials said.

WISCO Madagascar - one of many foreign firms keen to develop the Indian Ocean island's mineral resources - paid US$100 million for exploration permits in 2010.

"Our investments are made in stages, depending on the results of the survey. The investment decision is expected in six to eight months, then will come the construction phase, which will last four years," said WISCO Madagascar's CEO Jun Yuan Lou.

"The actual operation should start in five years," he told a news conference late on Tuesday, when signing an environmental impact study and exploratory drilling agreement with the National Environment Office (ONE).

Exploration in Madagascar, which has oil, cobalt, nickel, gold and uranium deposits, has been hampered by a political crisis since incumbent President Andry Rajoelina seized power in March 2009.

As this project proceeds, "environmental assessment studies, including the various public consultations will begin this week," ONE's Chief Executive Jean Chrysostome Rakotoary said.

An environmental permit will be issued at the conclusion of the studies, which will take at least 45 days, and after the company pays ONE US$350,000, he said.

The island's political crisis forced Madagascar Oil last month to declare force majeure on four of its oil blocks to protect its rights.

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