The place is a microcosm of the Third World and the project encapsulates the relationship between the First and Third worlds. The area is astoundingly beautiful, the people are poor and marginalised, the government is ineffective and in debt and the mining house rich and powerful.
So why did Andrew Lees and other environmentalists suspect that Tolanaro would end up like so many places in developing countries where a rich company buys off the government, the government spends the revenue on some white elephant project, the environment gets ruined and the local people get squeezed further into poverty and powerlessness?
Madagascar is nearly three times as big as Britain with a population of 12 million, but it produces less than one-300th of Britain's economy. An island kingdom ruled by France for 70 years and made independent in 1960, Madagascar was ruined by a pro-Soviet military dictator, Didier Ratsiraka; during his rule the country's economic product halved.
He lost elections in 1993, but the new constitution, designed to stop dictatorship, has dissipated power and made strong government impossible. The population grows at 3 per cent which means it will double in 20 years and most people will get steadily poorer. Tolanaro, a port three days by rough road from the capital, is a particularly neglected region.
The turnover of the mining giant Rio Tinto Zinc last year was $4.82bn (£3.1bn), almost three times Madagascar's gross national product. Its subsidiary, Qit, is offering to invest about $350m in the mine with a revenue for the government of $11m to $20 a year over 40 years. The British government, which backs RTZ's bid, argues that if RTZ is successful, other companies will follow.
The mine will remove about two-thirds of unique littoral forest behind the coastal lagoons. Many plants are unique to this forest. Qit, which has carried out extensive surveys and experiments, says the land can be restored as the mine progresses and the forest replanted.
But the issue is not simply about preserving a beauty spot. Time and again the impact of a large commercial enterprise on a poor subsistence area has resulted in a few people being given wage jobs and the rest ending up dependent and marginalised, their old way of life destroyed and no new source of livelihood available. The few locals who had heard about the mine said they wanted the mining company to build a school and a hospital and give them a "gift". None had any idea of what it would do to their lives.
RTZ has a good record of local social involvement in Namibia, South Africa and Zimbabwe. Although it will only directly employ 500 local people, it could become more deeply engaged in the social development of the area.
About 200,000 people, most subsistence rice farmers or fishermen, live around Tolanaro. Barefoot children play in the rubbish-strewn streets and local traders, mostly Indians, drive new 4 x 4 vehicles and have satellite dishes on their houses. The miningcompany is not threatening a centuries-old lifestyle of a community living in harmony with nature. It is stepping in to a society with its own dynamic which is widening the gap between rich and poor. The company could send it either way.
A project by the World Wildlife Fund, aimed at saving the rainforest in the region, has concluded that the way the local Malagasays live and farm their land will destroy the environment more surely than the mining company. At least Qit is offering to restore it. Madagascar has lost about 85 per cent of its forest cover as impoverished, lazy or ignorant farmers cut deeper into the forest.
Most local people do not value the forest for its own sake and its preservation is not a priority, Mark Fenn, director of the WWF scheme, said. "We are here to protect the biodiversity of the region. But if you want to do that it is the people's decision. You have to work with them." The WWF is organising vaccination and education programmes, hoping that small but crucial changes could reverse the spiral of poverty so people will not be forced into "slash and burn" farming, "Tavy" as it is known. It isoften the poorest landless families who cut down a new bit of forest, create a rice paddy, get a good crop in the first year and then move on in two years when the soil is exhausted or washed away.
The WWF aims to build social cohesion so that decisions about when and where to cut forest is at least an agreed, communal one. The project is held up by government bureaucracy and discussions about siting the new port at Tolanaro, but it is expected to be given the go-ahead this year.
If Qit is serious about restoring the forest and helping development, it will have to set up projects like WWF's. Qit will be the king of this area for the next 40 years with immense power but equivalent responsibilities. With the right mandate it is possible for it to have its mine, restore the forest and reverse the spiral of the people's poverty ... and still make a profit.