AREVA SIGNS URANIUM CONTRACT WITH NIGER

C O N F I D E N T I A L NIAMEY 000045 SIPDIS SIPDIS E.O. 12958: DECL: 01/14/2018 TAGS: EMIN ENRG EINV PREL FR NG SUBJECT: AREVA SIGNS URANIUM CONTRACT WITH NIGER REF: (A) 07 NIAMEY 983 (NOTAL) (B) 07 NIAMEY 641 (NOTAL) Classified By: Donald W. Koran, DCM, reasons 1.4 (b/d) ¶1. (U) The government of Niger and the French energy company Areva have concluded a contract concerning Areva's mining and purchase of Nigerien uranium, according to press reports and an Areva press release. The contract reportedly calls for the development of the Imouraren uranium mine at a total investment of one millions euros (about $1.5 million). The mine will reportedly produce about 5,000 MT/year of uranium. The contract also calls for a 50 percent increase in the price paid for uranium for the 2002008-2009 contract period, although the actual price has not been announced. The contract was signed in Niamey on January 13 by Nigerien president Tandja and Areva president Anne Lauvergeon. We are seeking to verify/confirm the details, some of which may still be under discussion. ¶2. (C) In addition to the Imouraren site, Areva affiliates Somair and Cominak currently produce a total of about 3,750 MT/year of uranium from existing mines. GON officials had previously reported that they expected that figure to increase to a total of 4,160 MT/year by 2011. The Chinese National Uranium Corporation (CNUC) is also expected to begin producing uranium, with a total output of 700 MT/year by ¶2011. (Ref b provides background on the Nigerien uranium industry.) ¶3. (C) Niger's uranium is located in the north, which has been the site of a rebellion by the predominately Tuareg rebel group, the Mouvement des Nigeriens pour la Justice (MNJ),since last February. The MNJ had demanded a greater share of uranium revenues and jobs. It has also complained about the environmental consequences of uranium mining. The MNJ had previously attacked the Imouraren site and briefly held a CNUC executive hostage near Ingall. ¶4. (C) The new contract follows a year of tense relations between Niger and Areva, due both to Nigerien suspicions that Areva was paying protection money to the MNJ, and to that fact that Areva was paying substantially below the world spot price for uranium under a three year contract that expired at the end of 2007. The GON expelled the head of Areva's Nigerien operations last July, which prompted a flurry of diplomatic activity leading to an increase the price paid for Nigerien uranium for the rest of the year (ref a). ¶5. (C) Comment: Notwithstanding the widespread reports that Niger was diversifying its uranium sector, including through the granting concessions to other (mainly Chinese and Canadian) companies and the signing a contract to sell uranium to a U.S. company, the Areva deal confirms Areva's predominate role in the Nigerien uranium sector for years to come. ALLEN