Niger - Uranium - France
Niger’s military government revoked the operating licence of French nuclear fuel producer Orano — formerly known as Areva — at one of the world’s biggest uranium mines, as it continues to cut ties with former colonial power France. State-owned Orano said on 21 June 2024 that it had been ordered out of the Imouraren mine in northern Niger which sits on an estimated 200,000 tonnes of the metal, used for nuclear power and weapons. Niger’s move follows years of delays since Orano obtained the permit in 2009. Mining was meant to have started at Imouraren in 2015 but development was frozen after the collapse in world uranium prices in the wake of the 2011 Japanese disaster when a tsunami hit the Fukushima Daiichi Nuclear Power Plant in the northeast of the country.
Russia aimed to assume operations based on an 03 June 2024 Bloomberg report that Russian state-owned nuclear company Rosatom is in talks to acquire Orano. “Russia has been stepping up its economic, diplomatic, and military links in Africa, including after the Niger coup, and they see this part of the world as a strategic investment opportunity,” said Mark Hibbs, a Berlin-based nuclear analyst with the Carnegie Endowment for International Peace. “Hand in hand, Rosatom has been diversifying its uranium investments in Africa.”
“Rosatom rejects as completely inaccurate the reports on its ‘plans’ to acquire uranium mining assets in Niger owned by Orano,” Rosatom told Reuters.
The French had been mining uranium in Niger since the Arlit open pit mine was opened in 1965 by SOMAIR, which is jointly owned by AREVA (63%) and the GON (37%). The Imouaren site was first discovered in 1966. Development was delayed until renewed interest in nuclear electricity generation dramatically increased the price of uranium. Prices, which peaked in June 2007 at over USD 130 per pound, have dropped considerably, but remain high. The GON granted AREVA an exploration license in 2006. The average ore grade at Imouraren is lower than at the two older operations, but total reserves are very large. AREVA planned to produce 3500 to 5,000 tons per year for over 35 years, which AREVA claims will make Niger the second largest uranium producer in the world. This calculation compares Niger's anticipated production in 2012 (8,000 tons) with current levels of production in other countries.
In 2007, the SOMAIR processing plant produced approximately 1,750 tonnes of yellow cake uranium, and current reserves are sufficient to maintain this level of production for at least 15 years. AREVA also operates the second mine at Akouta, which is owned by COMINAK, which is composed of AREVA (34%), the GON (31%), Overseas Uranium Resources Development Company of Japan (25%), and ENUSA of Spain (10%). Akouta is an underground mining operation that began production in 1978 and produced around 1,400 tons in 2007. The ore as originally mined contains only a low concentration of uranium. It is milled at mine sites to produce the uranium concentrate of over 80% uranium called "yellowcake."
During the 1970s, income from uranium production sustained Niger's economy, but production fell significantly when the world lost its appetite for nuclear energy following accidents at Three Mile Island and Chernobyl. Four shareholders: AREVA, OURD (Japan), UNUSA (Spain), and SOPAMIN (Niger), purchase the total output of the two producing mines at a price set by agreement between the companies' shareholders and the GON. Between 1987 and 2003, a period of low uranium prices, long-term contracts maintained prices above market levels, but the subsequent rise in world prices did not benefit Niger until the pricing was renegotiated and payments increased 50% effective January 2007. The most recent price negotiation, announced in January 2008, set purchasing terms and conditions for 2008 and 2009. According to World Nuclear Association records, AREVA had been paying royalty of US$57 per kg of production. The new two-year agreement boosted this to US$83 per kg. AREVA has honored this new price structure, even after prices dropped lower.
As part of the pricing agreement in 2007, GON negotiated the right to sell a portion of the production of the existing mines directly on world markets. In late 2007, Niger established a government-owned company, SOPAMIN, which holds the government's ownership share in the uranium companies and manages independent sales. SOPAMIN's direct sales option was subsequently increased to 900 tons, and the new mining contract for Imouraren also gives SOPAMIN the option to sell its share of production independently. SOPAMIN currently sells 300 tons per year to Exelon Corporation, the largest electric utility in the United States. This sale, however, is in part mediated by AREVA; because of the cost and difficulty of shipping uranium from Niger, SOPAMIN fulfills the Exelon contract by barter with AREVA, which arranges delivery of yellowcake produced in AREVA's Canadian operations. SOPAMIN has yet to identify a customer for the remaining 500 tons. Exelon that it planned to extend its existing contract with SOPAMIN, but had no interest in purchasing a larger amount from Niger.
The special characteristics of the world uranium market make it difficult for SOPAMIN to market large volumes of uranium at prices above what it would get from AREVA. Most yellowcake uranium is sold on long-term contracts to the limited number of companies that have the facilities to process it for use as fuel. As the world's most vertically integrated nuclear power company, AREVA has a dominant position in processing and sales of enriched fuel and a commanding presence in the development and construction of new nuclear power plants, which generally include long-term fuel contracts. SOPAMIN, a tiny organization based in the GON Ministry of Mines and Energy, does not have the transportation system or the global reach to be cost competitive.
AREVA controls and monitors the transfer of uranium produced at both mines. It is sealed in drums and transported by truck to the port of Cotonou, Benin, for shipment to the French port of Montoir. It is further refined and enriched at AREVA's Comurhex-Malvesi plant in southern France.
French dominance of the uranium sector in Niger is not without its risks, among them the public perception that the GON is too close to AREVA. This perception is reinforced by the fact that negotiations with AREVA as well as other mining companies have not been managed by technocrats from the Ministry of Mines and Energy, but instead have been negotiated by politicians at the highest level. France and AREVA have actively promoted Niger's participation in the Extractive Industries Transparency Initiative (EITI). Niger's EITI project has been established, but the political commitment to significantly greater transparency is not clear.
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