Niger and Areva haggle over future of uranium mining

By Time of article published Feb 3, 2014

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Joris Fioriti Niamey

Niger’s government and French nuclear giant Areva are engaged in tough talks on the future of uranium mining in the west African country, whose leaders want more money from the resource to help pay for development.

Production resumed at two uranium mines on Saturday after weeks of shutdown.

The contract expired at the end of last year, but Areva was determined to keep down the cost of its operations. “The machines are running and production resumed this morning,” Salifou Chipkaou, the secretary-general of mining union Synamin, said on Saturday.

An Areva spokesman confirmed that operations had resumed at the two mines, Cominak and Somair.

The news followed weeks of shutdown in the world’s fourth-largest uranium producer, which is mired in poverty and ranks last on the UN’s Human Development Index.

Areva has operated the mines since the early 1970s, and pays royalties of 5.5 percent on extracted ore under deals Niger signed with France, its former colonial ruler, in 1961 and 1968.

The government wanted to apply a 2006 mining law, which ends tax breaks for foreign companies, to Areva, which has thus far been exempt. If the 2006 law were applied, its tax rate would rise to 12 percent.

The two sides had met four or five times, Niger’s Minister of Mines, Oumarou Hamidou Tchiana, said last month, mentioning a further round of talks.

A spokesman for Areva said the firm was keen to maintain the lowest acceptable cost for its uranium mines in Niger, which is the group’s second-largest producer, after Kazakhstan and before Canada.

The stakes are critical both for the deeply poor country and for France, where the state owns 80 percent of Areva and where nuclear energy provides 75 percent of electricity.

Areva extracts about a third of its uranium from the mines in the northern Arlit region.

Niger seeks greater control of its natural resources and uranium accounts for more than 70 percent of exports, according to Oxfam France, which is lobbying for a fairer distribution of the mining wealth.

Tchiana said that uranium brought in only 70 billion CFA francs (R1.6bn) for the state last year, which was less than 5 percent of the national budget.

The situation was worsened by plummeting uranium prices, which fell to about e61 (R915) a kilogram last year from e290 in 2008, said the minister, who added that on current terms Niger’s income this year would total between 20 billion and 30 billion CFA francs.

When the contracts expired, Areva shut the sites down for over a month, officially for maintenance, its spokesman said, though the Niger government decreed the mines could be worked. Chipkaou accused Areva of exaggerating the need for maintenance and negotiating in “bad faith”, using the shutdown to pressure the government.

“We are going to pursue discussions until the end of February to find common ground,” Tchiana said.

No previous regime has sought to change the accords. Sanoussi Jackou, an adviser to President Mahamadou Issoufou, said they gave the ex-colonial power 75 years of “advantages” when it came to uranium mining. – Sapa-AFP

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