Special Report: Areva and Niger’s uranium fight – by Daniel Flynn and Geert de Clercq (Reuters India – February 5, 2014)

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ARLIT, Niger/PARIS – (Reuters) – When France began mining uranium ore in the desert of northern Niger in the early 1970s, Arlit was a cluster of miners’ huts stranded between the sun-blasted rocks of the Air mountains and the sands of the Sahara.

The 1973 OPEC oil embargo changed that. France embraced nuclear power to free itself from reliance on foreign oil and overnight this remote corner of Africa became crucial to its national interests.

Arlit has grown into a sprawling settlement of 117,000 people, while France now depends on nuclear power for three-quarters of its electricity, making it more reliant on uranium than any country on earth. Niger has become the world’s fourth-largest producer of the ore after Kazakhstan, Canada and Australia.

But uranium has not enriched Niger. The former French colony remains one of the poorest countries on earth. More than 60 percent of its 17 million people survive on less than $1 a day.

Arlit is a dusty and neglected place, scoured by desert sandstorms and barely touched by the mineral wealth it ships off to Europe each year. “There are neighborhoods which go without water for three weeks at a time,” said Deputy Mayor Hassan Hamani. “There are schools where the pupils have to sit on the floor or study in straw huts.”

Now Niger’s government is demanding a better deal from Paris, and specifically from state-owned nuclear company Areva. The two sides began talking more than a year ago but failed to clinch an agreement before Areva’s 10-year mining contracts expired on December 31.

Areva suspended production at its two sites in Niger in mid-December: the open-cut Somair mine at Arlit and giant underground Cominak pit nearby. The company says the closure was for maintenance but Synamin, a union that represents mining workers, called it a negotiating tactic. Production resumed at the start of February.

Areva and Niger’s just-expired agreements have never been made public. But Reuters has reviewed documents which reveal that Areva’s mines pay no export duties on uranium, no taxes on materials and equipment used in mining operations, and a royalty of just 5.5 percent on the uranium they produce. A spokesman for Areva declined to confirm the authenticity of the documents and did not comment on their contents.

Niger’s President Mahamadou Issoufou says the deals are a throwback to the post-colonial era, when France played a dominant role in the economies of its former African territories. His government wants to cut the tax breaks and raise the royalty rate – its largest source of income from the mines – to as much as 12 percent.

That would be more than the 5 percent charged by most Australian states, but bring Niger into line with the 13 percent charged by Canada’s uranium-producing province of Saskatchewan over the past decade. In Kazakhstan, the official rate is 18.5 percent. Areva produces uranium in both Canada and Kazakhstan but would not detail the royalties it pays in those countries. (It explores for uranium in Australia but does not mine it there).

For the rest of this article, click here: http://in.reuters.com/article/2014/02/05/us-niger-areva-specialreport-idINBREA140AA20140205

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