Biodiversity offsets can be defined as fulfilling three criteria: “(1) they provide additional substitution or replacement for unavoidable negative impacts of human activity on biodiversity, (2) they involve measurable, comparable biodiversity losses and gains, and (3) they demonstrably achieve, as a minimum, no net loss of biodiversity.” (Bull, Suttle, Gordon, Singh, & Milner-Gulland, 2013, p371). In developing countries, mining companies are implementing biodiversity offset projects to compensate the degradation caused by the extraction of minerals. Mining companies can represent an important national financial windfall and offsets are seen as counteracting any associated environmental loss. However, the implementation of such schemes faces critical challenges which need investigation. For instance, how to integrate the socioeconomic targets as a proxy for poverty alleviation into biodiversity offsets is still poorly explored and not yet properly considered by mining companies (Seagle, 2012). In this project, we analysed biodiversity offset mechanisms and their consideration of local livelihoods through one case study: Ambatovy a mining company operating in Madagascar. The main aim of the research is to determine the potential impacts of biodiversity offsets on local livelihoods through changes in the supply of locally important ecosystem services and how the outcomes for poverty alleviation can be improved.