Niger - Uranium - New Players
On July 26, 2023, the presidential guard of the Republic of Niger staged a coup. On 31 July 2023, the media reported that Niger had suspended uranium and gold exports to France. The rebels will struggle to find an alternative market for the 2,000 tons of uranium. In theory, Russian or Chinese companies could agree to buy these quantities of uranium concentrate (Russia consumes about 6,000 tons per year). However, this would require substantial investments in logistics, mine security, and above all, the neighboring countries would have to permit the transport of these cargoes through their territory.
The Government of Niger had been promoting exploration activities actively in the mining sector since the mining law was updated in February 2006. Booming international prices attracted new mining exploration and investment around the world, and Niger wanted to diversify beyond AREVA. According to Mahaman Nomao Djika, a Deputy in the former National Assembly, Niger awarded 127 exploration permits for uranium and 27 exploration permits for other metals between June 2006 and December 2008. Mahaman's efforts to promote an audit and full accounting of all parties, including intermediaries who benefitted from this process, was subsequently voted down.
The process of negotiation and the precise terms of these exploration agreements had not been made public, but the law establishes a three-year term for exploration, renewable for two further terms providing that the company investment in exploration activities meets specified levels.
Among companies with active uranium exploration permits, only one U.S.-based company: American Technologies Incorporated, based in Oak Ridge, TN, which has two permits immediately north of the Chinese operations at Azelik, but did not maintain an office or staff in Niger. American Technologies Incorporated has provided nuclear services to a wide range of American and international companies, and ATI Chairman Dr. Dinh Duc Huu, a Vietnamese-American nuclear scientist, is a senior advisor on nuclear energy to the Government of Vietnam. Other U.S. firms provide exploration services to companies with exploration permits, including a number of established "junior" mining companies based in Canada. The term "junior" refers to smaller exploration companies, frequently based in Canada, where the large and well established mining sector provides access to potential investors.
The permit mania attracted other investors with more enthusiasm than mining expertise, and a number of exploration permits had already changed hands or been reassigned. The Chinese originally obtained a second exploration permit for Madaouela, a deposit near Arlit that originally had been evaluated by AREVA.
AREVA had been conducting research and exploration in Niger for decades. Research information is supposed to be shared with the Ministry of Mines and Energy, but it has been reported that AREVA declined to share the research maps and information with the Chinese. The Madaouela permit subsequently was reassigned to Trendfield, a China-based company involved in mining negotiations; Trendfield exchanged the exploration rights for a 12% shareholding in GOVI EX, a private uranium exploration company headed by Govind Friedland, whose father has been involved in various global mining ventures for decades. GOVI Ex also exchanged a 12% shareholding for the uranium permits held by Semafo, and subsequently announced an investment by the Canadian mining giant Cameco, the world's largest uranium mining company, which retains the right to increase shareholding to up to 50%. These robust ties to larger and better financed companies made Govi-Ex the strongest player among the various exploration companies.
Other players with uranium permits include companies from Canada, England, Russia, and India. Companies with ties to India include Mumbai-based Taurian Resources and Earthstone Group, founded by a non-resident Indian based in Indonesia. India's announced focus on nuclear power generation will translate into significant demand for uranium fuel, but it was not yet clear that either of these companies had the financial resources to develop its permits in Niger.
A consortium led by China Nuclear International Uranium Corporation (SINO U), a subsidiary of the China National Nuclear Corporation (CNNC), is developing the Azelik uranium mine at Teguida, a remote area north of Ingal. Ownership in the consortium, incorporated in Niger as SOMINA, is made up of SINO U (37%), the Government of Niger (33%), Beijing ZXJOY Investment (25%), and the Government of South Korea, which recently purchased the remaining 5%. The Teguida Mine is projected to produce 600 tons per year from 2011, with the potential for higher levels of production if SOMINA's continued exploration of the concession identifies higher reserves. Because of the remote location of this mine, the US$ 140 million construction contract signed in April 2008 with Sinodydro Corporation includes a coal-fired power plant as well as the mine and processing plant.
Niger's uranium resources are among the globe's largest, but costs are high due to Niger's remote location and poor infrastructure. Historically, the French have dominated the uranium sector in Niger, and AREVA's new commitment at Imarouren further consolidates Niger's strategic importance to France. The new operations already under construction are projected to make Niger the second largest global producer, with considerable potential for additional production if the global market for uranium is sustained by renewed investment in nuclear energy.
In order to diversify investment in the mining sector, Niger opened vast new areas of the country to exploration. This has attracted interest and exploration by new companies, a significant percentage of which are new to mining and lack sufficient capital or access to capital to develop their claims; they hope to demonstrate sufficient resources to attract investment from larger, more-established, producers. Other countries, including Namibia, Kazakhstan, Australia, and Canada, also have significant uranium resources and are attracting new investment. If Niger is to compete successfully for new investment and create a more diverse uranium sector, it will have to address both policy and infrastructure issues in a more open and pragmatic way.
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