Start the conversation
By Staff Reports
French nuclear energy giant Areva SA (PINK: ARVCF) will pay 50% more for uranium mined in Niger, while investing more than $1.49 billion in the country's as yet untapped Imouraren deposit – possibly the second largest in the world – according to an agreement signed this week, Bloomberg reported.
The price Areva pays for Niger-excavated uranium was changed to reflect uranium's recent surge in value and projected long-term prices. Niger's government hopes the nearly $1.5 billion investment – combined with an existing operation with China Nuclear International Uranium Corp. at its Teguida mine – will make Niger the world's second largest uranium producer by 2011.
Currently Africa's biggest uranium producer, Niger will also be allowed under the new agreement to sell 1,800 metric tons of uranium to the world market over the next two years, Reuters reported.
All totaled, Niger's revenue from uranium mining will rise 14-fold to $227 million (100 billion CFA francs), Bloomberg News reported, citing a televised speech by Ali Badjo Gamatie, special adviser to the president on mineral matters.
It's "a big push forward," Gamatie said, speaking from Niamey, the state capital. "It has been very rewarding for Niger to change the terms of the last agreement."
For Areva though, the new terms might be a reality check the company can ill afford. Areva has held a virtual monopoly on Niger's uranium reserves for more than 30 years, but a global rise in nuclear power initiatives has made the former French colony a very popular target for uranium exploration.
So, not only will Areva have to pay more upfront for a once cheap commodity, the French firm is also relinquishing what was once total control of a productive and profitable source of uranium, which may prove far more costly in the long run.
News and Related Story Links: