Niger Junta played the Uranium card at the most opportune moment. As soon as they consolidated power there was a blanket ban over exports of uranium to France. Before the blow softens up, another punch was delivered revising royalty pay for mining uranium within Niger. Undoubtedly, the double whammy startles France.
Out of the European Colonial powers, France has the most dubious reputation of exploiting natural resources to the hilt and then do nothing to develop their colonies. Even after granting independence in paper, France continues to stage manage West African Francophone countries. Niger got the severe beating in Sahel Region.
French company Orano (previous name Areva) is in the uranium mining business in Niger for several decades. It owns majority stake in three mines. Aermine in the heart of Arlit region was the first to be opened for exploitation. Almost depleted, this mine can continue to be productive for one more decade. The second mine Akokan close to the Arlit region is almost fully depleted leaving undesirable disasters to ecology as post-closure procedure was not followed up. The third one Imouraren slated to be one of the largest uranium minds in the globe remains unexplored so far.
Consequently only Aermine is still open for production albeit in lesser output level. The Junta was well advised by a hidden brain whose identity is yet to be revealed, pounced upon uranium exports to France as geoeconomics power tool. Their initial ban was quickly followed with a demand for staggering hike in price. What stupefied France more is that the revision amounts to several multiples of the current payment of less than one Euro per kilo? Asking price of 200 Euro per kilo is something let alone France, even the global market cannot agree with. For reference, the prevailing price is around US$ 50 per pound working out Dollar 124 per kilo.
France was caught in a clap trap. At present France imports 17.6 MT of uranium from Niger accounting for 20% of her imports at damn cheap price. Moreover, Niger stands only second to Kazakhstan which provides about 23.8 MT hovering around 27% of total imports. For France sourcing the shortfall is not difficult yet she has to pay hefty spot prices to do that.
Up goes in flame the sunk cost in developing the Imouraren mind. Both Russia & China are willing to replace as operators of these uranium mines and even buy the entire production. Plainly put, China is already in the scene as JV partner of one of the uranium mines in Niger and can extend her scope and scale seamlessly.
Not doing anything is a bitter bill to swallow for the colonial master. After delivering series of threats wisdom dawns in Elysee Palace that any arbitration by France in the French Courts as provided by the business contract is a no go one, mainly because it can open the cane of worms as regards to the degree of exploitation that France was carrying on without any impunity for decades going against the grain of French motto of “liberty, equality and fraternity”.
Facing a dim future in securing cheap uranium supply, France has to find a novel business strategy to continue with business relationship with Niger. Even then she cannot run away from the geoeconomics landscape where possessing minerals is the newest power spectrum as Niger demonstrated and so would be by rest of uranium exporting nations who are eagerly waiting in the wings to get additional windfall.
Cheers!
Muthu Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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