Niger state to increase direct sales of uranium

By Abdoulaye Massalatchi

NIAMEY, Jan 15 (Reuters) - A renewed partnership between Niger and French nuclear group Areva (CEPFi.PA) allows the West African state to directly sell 1,800 tonnes of uranium to the world market over the next two years, the government said.

Areva operates both of Niger's existing uranium mines, located in the Saharan north, and until last year had exported the country's entire production, paying a fixed royalty to the former French colony.

But last year, for the first time, Nigern sold 300 tonnes of uranium directly to the international market as part of efforts to diversify its partners. The sale was made to U.S. nuclear power group Exelon Corp.

Under the terms of a new operating partnership negotiated at the weekend with Areva, Niger's biggest foreign investor, these direct sales by the Niger state will be increased in 2008 and 2009, the government's chief negotiator Ali Badjo Gamatie said.

"Niger will be in a position to directly sell to the international market 900 tonnes (of uranium) in 2008 and a similar amount in 2009," he said late on Monday.

Gamatie said the sales would be made by Niger's Mines Patrimony Company, SOPAMINES, which was set up in November to run the state's stake in mining ventures and handle state sales of uranium and other mineral projects.

The Somair and Cominak mines operated by Areva are currently Niger's only active mines, producing around 3,500 tonnes of uranium a year.

But Niger hopes to become the world's No. 2 uranium producer by 2011 by increasing overall output to 9,000-10,000 tonnes a year through development of the Imouraren deposit with Areva, and of the Teguida mine in cooperation with the China Nuclear International Uranium Corp. (Sino-U).

Niger renewed its long partnership with Areva on Sunday in a deal which foresees more than 1 billion euros ($1.49 billion) of investment by the French company in the Imouraren site.

Areva also agreed to a 50 percent price increase to reflect a four-year surge in uranium's price on world markets.

A rebellion by Tuareg fighters in Niger's uranium-rich north strained relations between the government and Areva last year. Rebels attacked the Imouraren mine site in April and at one point the government even accused Areva of supporting the insurgents, a charge strongly denied by the French company.

But Sunday's accord settled differences and opened the way for Areva's development of the Imouraren project.

"We've had some difficult moments, and if this accord hadn't been reached, there was a risk of the launch of the Imouraren operations being delayed," Mines and Energy Minister Mohamed Abdoullahi told national radio.

The launch of new nuclear power programmes in several countries around the world pushed uranium to a record high of $136 a pound in 2007, leading Niger to issue new exploration permits to ramp up the lucrative ore exports.

Areva had for more than 30 years enjoyed a monopoly on uranium mining in Niger, but in the last two years the government has issued dozens of uranium exploration permits to companies from China, Canada, Britain, South Africa and elsewhere. It says it is planning to issue many more. (Editing by Pascal Fletcher)