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Niger - China Relations

Republic of NIger [RON] PRC diplomatic relations began on July 20, 1974. The Government of Niger appointed Idrissa Harouna as its first ambassador to China in 1978. An estimated some 300 Nigerien expatriates live and work in the PRC. On July 22, 1992, Niger and Taiwan announced diplomatic relations, and so China announced on July 30 to suspend diplomatic relations with Niger. On August 19, 1996 Sino-Nigere diplomatic relations were restored, and since then the relations between the two countries developed smoothly.

Le Sahel (the state newspaper) prominently featured reports on the Sino-Nigerien and Sino-African partnerships in the 24 July 2009 edition. This featured a front-page image of Beijing with the headline "The Marvels of the Middle Empire" together with a two-page story and a full-page interview with the Nigerien Ambassador to the PRC Boubakar Adamou.

Adamou stressed that the RON's engagements with the PRC are consistent with the global framework of expanding relations between the PRC and the African continent since the creation of the Forum on Sino-African Cooperation in 2000. He stated that South-South cooperation has included increased loans and credits, more development assistance in lieu of direct aid, the creation of a Sino-African development fund, cancellation of debt and the opening of the Chinese market to African products. Labeling Sino-Nigerien cooperation one of Niger's most fruitful partnerships, he lauded several ongoing development projects in Niger, primarily in the areas of agriculture, hydrology, environment and infrastructure. He spoke of the many high-level visits that had contributed to the deepening of RON-PRC relations,

China is building a major portfolio in Niger's resource sectors and will probably replace France as Niger's top foreign investor when projects under construction are fully operational. Chinese investments include oil and gas production, refining, uranium mining, and infrastructure. On the Nigerien side, the bilateral relationship was managed directly from President Tandja's office, and there is a striking lack of transparency in the terms of investment agreements, most of which had been negotiated without direct involvement of professional staff from the Ministry of Mines and Energy.

There were no examples of US-China collaboration in Niger. There was little scope for US-China collaboration when the comparative advantage of the Chinese was their willingness to ignore international standards of transparency and commercial viability.

China National Petroleum Corporation (CNPC) had a US$5 billion deal to develop the oil and gas resources of Niger's Agadem block. That concession was negotiated directly with the Government of Niger (GON) after the government rejected a competing offer by the Mobil-Petronas consortium that had done much of the initial exploration. China sealed the deal by agreeing to construct a 20,000 barrel per day petroleum refinery, which was considered a "must have" by President Tandja. Economic analysts question the economic viability of the refinery, which will produce far more than Niger's current consumption, because high production and transportation costs will make it uncompetitive to export. In 2009, China paid a "signing bonus" originally announced as US$300 million, which helped to boost Niger's 2009 revenue by 26% over the previous year.

Although the terms of the production sharing agreement were not public, much of the oil production was expected to be exported by pipeline, with additional potential for export of gas when/if the proposed Trans-Sahara gas pipeline was built from Nigeria to Algeria through Niger. The block included three different fields, Goumeri, Sokor and Agadi, which have total recoverable reserves estimated at 295 million barrels. The Chinese also had exploration rights to two additional blocks, Bilma and Tenere, in the same remote desert region. No detailed information was available about the progress of construction at the Agadem site, but a high volume of container traffic moves along the highway across southern Niger and CNPC established large staging areas near Diffa, the eastern-most regional capital located near President Tandja's home town.

The Nigerien company established to own and operate the refinery, Societe de Raffinage de Zinder (SORAZ) is 60% owned by CNPC and 40% by the GON, but CNPC is covering all project costs until the refinery is commissioned in 2011. Estimated production of 20,000 barrels per day was far in excess of Niger's 2010 consumption of under 3,000 bpd and the refinery was nearly 1,000 km distant from Niger's capital, Niamey. Dagang Surface Construction Company was awarded the contract to construct the 462 km pipeline to deliver oil from the production area to the refinery.

China was also the second largest investor in Niger's uranium mining sector. China's state-owned uranium firm, SINO-U, invested US$300 million to develop a new mine at Azelik, which was due to begin production in late 2010. The Nigerien company formed to build and own the mine, Societe des Mines d'Azelik (SOMINA) is a joint venture established in 2007 by SINO-U (37.2%), the GON (33%), Beijing ZXJOY Invest of China (24.8%), with Trendfield Holdings awarded a 5% stake as promoter of the deal. This 5% holding was subsequently purchased in April 2009 by Korea Resources Corporation (KORES). As part of the agreement, Trendfield would assist KORES with the long-term off-take purchase agreement of 400 tons of uranium annually from the Government of Niger.

Niger law gives the GON a 10% carried interest in every mining project, but allows the GON to invest in order to retain greater percentage of ownership. In 2009, the China Import-Export Bank loaned Niger US$ 95 million to cover Niger's share of the capital costs of the SOMINA mine, which would produce an estimated 700 tons per year.

Chinese-funded new infrastructure in Niamey included a new four- lane bridge across the Niger river that was nearing completion in 2010, a large new Embassy compound with housing for all staff, and a separate new Economic and Trade Center. Each of the new Chinese-Nigerien joint ventures was represented by a modern new office building in the capital. Construction by Chinese crews using materials imported from China had limited the benefit to the local economy.

The oldest Chinese investment in Niger is the textile firm Enitex, which was purchased by private Chinese investors when it was privatized around ten years ago. The company subsequently closed the fabric weaving operation, but continued printing on cotton fabric imported from China. Enitex products are popular in both domestic and regional markets, but high costs and rigid labor practices constrained profitability.

Since the early 1990, China had sent medical doctors for one-year rotations at the National Hospital in Niamey and several regional hospitals. A recent initiative to place young Chinese volunteers in Niger has not been as successful; the first group arrived in 2010, months ago, but most were still waiting for an appropriate placement, and the Economic and Trade Office seemed likely to terminate the program.

President Tandja was personally involved in building Niger's bilateral relationship with China, his son managed the investment relationships in his capacity as the commercial counselor in Niger's Embassy in Beijing, and members of the President's family were reputed to benefit financially from the investments. The personal nature of the relationships, the lack of transparency in the terms of investment, and the high probability of corruption made US collaboration in the investment sector highly unlikely.





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Page last modified: 07-05-2017 19:07:14 ZULU