Diversity and Inclusion - best laid plans
Out-Law News | 27 May 2014 | 4:08 pm | 2 min. read
Areva said current world uranium prices are “not sufficient to allow profitable operation” of Imouraren, in Niger’s northern Agadez region, which is considered to be one of the largest deposits of uranium in the world.
However, Areva said a joint committee would be set up to decide on a schedule to starting mining “depending on changes in the market”. Areva has said previously that production at Imouraren could start in early 2016.
Areva has estimated investment in the project (29-page/ 2.31 MB PDF) to be around €1.9 billion ($2.6bn). Infrastructure development for the project includes living quarters, an airstrip, electrical and telecommunications networks. Civil engineering works at the site began at the end of 2012.
In addition, Areva said it will contribute nearly €120 million ($164m) to support other key infrastructure projects, including funding for improvements to the highway connecting the city of Tahoua in Niger’s south to the uranium mines at Arlit, some 500 kilometres to the north.
According to Areva, 53% of purchasing related to all its mining projects in Niger will be from local suppliers, with 70% of revenues going to the state, 27% to Areva and the remainder to other partners. Mining projects are expected to create more than 5,300 jobs, more than 98% of which will go to Nigeriens including 90% of management positions, Areva said.
Regarded as the largest open-pit uranium mine in Western Africa and the second largest in the world, Areva said Imouraren “will enable Niger to takes its place as the second ranking uranium-supplying state in the world by doubling its current production levels”. The foundations for the site were laid in May 2009 and production is estimated at almost 5,000 tonnes per year for more than 35 years.
The Imouraren SA joint venture company is 56.65% owned by Areva, 33.35% by Sopamin, the agency that manages Niger’s mining interests, with South Korea’s Korea Electric Power Company holding a 10% stake.
Niger minister of state Omar Hamidou Tchiana said the new agreement with Areva “finally marks the establishment of a ‘balanced partnership’.
Areva said the agreement also “enshrines the renewal” of mining contracts held by the companies Somaïr and Cominak. Somaïr is 63.6% owned by Areva and 36.4% by Sopamin. Areva holds a 34% stake in Cominak, with Sopamin, 31%, Japan’s Overseas Uranium Resources Development Company Ltd 25% and Spain’s Empresa Nacional des Uranio S.A 10%.
Niger and Areva have agreed to appoint managing directors of Nigerien nationality to the boards of Somaïr and Cominak, in 2014 and 2016 respectively, which Areva said “represents a major step forward for Niger in terms of its involvement in the governance of these companies”.
According to the London-based World Nuclear Association (WNA) Somaïr and Cominak, Niger’s “two existing significant uranium mines”, were licensed to the end of 2013 and in mid-December 2013 both were shut down for maintenance pending negotiations on licence renewals. The WNA said the mines provide 7.5% of world mining output from Africa's highest-grade uranium ores.
French credit insurance company Coface said uranium was Niger’s largest export product in 2012 (43% of the total), followed by oil (12%). Quantities of oil exports are expected to rise this year while “uranium sales are likely to stall and are not expected to regain momentum before 2015”. Coface said this deficit should be covered by direct investments in mining, grants and loans from public multilateral and bilateral creditors. Coface said: “The government is relying mostly on increased revenue collection in 2014 from oil and uranium production so it can substantially increase spending on education, health and road infrastructure.”
“This is a welcome investment in the front-end of the global nuclear fuel cycle," said Christopher White, an energy expert at Pinsent Masons, the law firm behind Out-Law.com. "Security of supply of uranium is of paramount importance to the world-wide nuclear sector and it’s vital that investment is made across the whole nuclear fuel cycle, including uranium mining, to ensure that fuel cycle capacity and infrastructure keeps pace with the expected growth of new nuclear plants around the world over the coming years.”
Diversity and Inclusion - best laid plans