'Balanced partnership' for Areva and Niger

27 May 2014

The Nigerien government and Areva have signed a new partnership that provides Niger with higher sovereign royalty payments from mining operations led by the French state-controlled firm.

The two companies that mine uranium in Niger are Somair and Cominak which both have major portions of equity held by Areva and the Nigerien National Office of Mineral Resources. Their mutual approval for new terms was sealed by a signing with Areva CEO Luc Oursel in the capital Niamey yesterday. Signing for Niger were Omar Hamidou Tchania, minister of mines, and Gilles Baillet, minister of finance.

Areva said the new deal "enshrines" the renewal of mining contracts under Niger's 2006 mining law, which raised Niger's royalty taxes from the 5.5% of previous agreements to 12-15% dependent on profits. This had proven a sticking point in negotiations, particularly as low uranium prices have reduced profit from uranium mining to such an extent that Areva suspended operations by Somair and Cominak in December 2013.

However, the deal was agreed in "a spirit of mutual respect and complete understanding," according to Tchania, who noted that it "finally marks the establishment of a 'balanced partnership' as desired by President of Niger Issoufou Mahamadou."

The deal includes for the first time that the firms' boards will include Nigerien managing directors - appointed this year for Somair, and in 2016 for Cominak. Areva will provide €90 million ($122 million) to support constructing a road from Tahoua to Arlit, near the uranium developments, as well as a further €17 million ($23.1 million) for development in the surrounding Irhazer Valley. Niger will also receive a new headquarters building for Somair and Cominak, which will be built by Areva at a cost of €10 million ($13.6 million).

Oursel said the deal would "affirm the major place held by Niger in the global uranium industry." The country is the world's third biggest supplier of uranium, meeting 7.5% of demand. 



Uranium prices are currently too low to allow profitable operation of the new mine at Imouraren, said Areva. Excavation started on Imouraren's first pit in 2012 and Areva has previously announced 2016 as a probable start date. Now the company will set up a joint strategic committee with the Nigerien government to decide when to start production.

Somair is 63.6% owned by Areva and 36.4% by Niger through the state mining assets company Sopamin. Cominak is 34% owned by Areva, 31% by Sopamin, 25% by Japan's Overseas Uranium Resources Development Co, and 10% by Enusa.

The future Imouraren mine is 56.65% owned by Areva, 33.35% by Sopamin and 10% by South Korea's Kepco.

Researched and written
by World Nuclear News