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article imageNiger, Areva tussle over future of uranium mining

By Joris Fioriti, Boureima Hama (AFP)     Feb 2, 2014 in Business

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 Areva's two uranium mines in Niger on Saturday after weeks of shutdown.

The contract binding the two parties expired at the end of last year, but Areva was determined to keep down the cost of its operations in the desert territory.

"The machines are running and production resumed this morning," Salifou Chipkaou, secretary general of mining union SYNAMIN, told AFP by phone on Saturday from the mining town of Arlit in northern Niger.

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 United Nations' Human Development Index.

People protest against French nuclear energy firm Areva  over its signing of a new agreement with Ni...
People protest against French nuclear energy firm Areva, over its signing of a new agreement with Niger's government over uranium extraction activities, on December 21, 2013, in Niamey
Boureima Hama, AFP/File

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

The government wanted to apply a 2006 mining law that 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 already met four or five times, "alternately in Niamey and Paris", Niger's Minister of Mines Oumarou Hamidou Tchiana said in mid-January, announcing 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 sub-Saharan country and for France, where the state owns 80 percent of the shares in Areva and where 75 percent of electricity production is nuclear in origin.

Plant equipment is pictured at France's state-owned nuclear giant Areva's uranium mine in ...
Plant equipment is pictured at France's state-owned nuclear giant Areva's uranium mine in Arlit, Niger, on September 26, 2010
Issouf Sanogo, AFP/File

Areva extracts about a third of its uranium from the Cominak and Somair mines in Niger's northern Arlit region, which is vulnerable to attacks by Islamist extremists.

Five French people and a Togolese worker were kidnapped in 2010. Two of them were freed the following year and the other four were released at the end of 2013.

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

Tchiana said that uranium brought in only 70 billion CFA francs (about 107 million euros, $144 million) for the state in 2013, which was less than five percent of the national budget.

Protesters hold a banner reading 'Areva  Respect the Law instead of making it  2043 is not tomo...
Protesters hold a banner reading 'Areva, Respect the Law instead of making it, 2043 is not tomorrow!', during a demonstration in Niamey, Niger, on December 21, 2013
Boureima Hama, AFP/File

The situation is worsened by plummeting uranium prices, which fell from 290 euros per kilo in 2008 to about 61 euros per kilo in 2013, according to the minister, who said that on current terms Niger's income would in 2014 total from 20 billion to 30 billion CFA francs (30.5 million to 46 million euros).

The timing of the negotiations was "not necessarily very easy", Areva's chief executive Luc Oursel acknowledged in December, blaming the price cut on "delays in firing up Japanese nuclear reactors" after the Fukushima catastrophe of 2011.

When the contracts for the Cominak and Somair plants expired, Areva shut the sites down for more than a month, officially for maintenance, according to an Areva spokesman, though the Niger government had decreed that the mines could still be worked.

Work at the mines restarted Saturday, but SYNAMIN's 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 the discussions until the end of February in order to find common ground," Mines Minister Tchiana said.

"Areva's people take advantage of negligence by successive regimes in Niger to practise their greed," Sanoussi Jackou, an advisor to President Mahamadou Issoufou, recently said in a televised debate.

No previous regime has sought to change the cooperation accords signed with France in the 1960s. Jackou said they gave the ex-colonial power 75 years of "advantages" when it came to uranium mining.

In consequence, "if Niger raises the legislation of 2006, Areva asks 'Does it conform to the 1968 accords?'," Jackou said.

"Areva must agree to give up its tax privileges," said Anne-Sophie Simpere of Oxfam France, denouncing the French government, a key party to the deal, for keeping quiet on the matter.

"Niger can't allow itself to wait 30 more years to be able to reap all the benefits" of its natural resource, she added.

Ali Idrissa of Rotab, a Nigerien association, demanded the application of the 2006 tax law to Areva.

"Neither Areva's blackmail of its personnel, nor a ban on demonstrations by Nigerien authorities, will dampen our determination to fight for a win-win contract," he said.

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