Niger sees Areva mine start delayed to end of 2015

Fri Dec 6, 2013 7:03am EST

Related Topics

* President sees uranium mine start-up delay

* Confident of balanced deal with Areva by year-end

By John Irish

PARIS, Dec 6 (Reuters) - French nuclear company Areva will delay the start of uranium production from its Imouraren mine in Niger by at least six months to the end of 2015, Niger President Mahamadou Issoufou said on Friday.

Speaking ahead of the Franco-African Summit which begins on Friday, Issoufou told reporters he was confident a deal to renew 10-year contracts for mines run by Areva in northern Niger would be renewed by the end of the year with a fair outcome for both sides.

The giant Imouraren mine, which is due to double Niger's production of the nuclear fuel, was initially due to start production in 2012. The date has been repeatedly pushed back amid security fears in the desert north with mid-2015 the most recent target deadline.

In January, Niger announced that Areva had agreed to pay 35 million euros ($46.71 million) in compensation for delays to the project.

"We think that production at Imouraren will begin at the end of 2015, start of 2016," Issoufou said. "We have established this timeframe taking into consideration Areva's concerns."

Members of Issoufou's government have said his campaign promises are based on revenues coming from Imouraren and have insisted that production begin before he seeks re-election in the 2016 presidential elections.

Once Imouraren enters production, Niger will rank as the world's second-largest uranium supplier. The mine will produce 5,000 tonnes of uranium a year but requires investment of 1.2 billion euros to begin.

Issoufou said Niger and Areva were in final negotiations over the terms of their partnership deals for the Somair and Cominak mines, which together produced around 4,500 tonnes of uranium last year.

Areva has a 63.6 percent stake in Somair and 34 percent in Cominak.

Ten-year contracts expire at the end of this year and Niger, one of the poorest countries, wants to dramatically increase the state's revenues from the mines.

"The negotiations are progressing normally," Issofou said. "Our objective is to balance the deal between us and Areva. We have been in this strategic partnership for 40 years and want it to continue, but it has to be balanced."

Industry watchdogs, including the local branch of Publish What You Pay, have accused Areva of a lack of transparency in how it reports revenues and costs in Niger.

France relies on nuclear reactors for roughly three quarters of its electricity which Areva builds and supplies with fuel. International uranium prices, however, have slumped after the 2011 Fukushima disaster in Japan, squeezing Areva's earnings.

Niger is calling upon the company to invest in infrastructure, including resurfacing the so-called 'uranium road' which links the town of Tahoua and the remote mining region of Arlit, more than 1,000 km north of the capital Niamey.

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