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Niger sells first 300 tonnes uranium to U.S. Exelon

NIAMEY, Aug 28 (Reuters) - Niger has sold 300 tonnes of uranium to U.S. nuclear power group Exelon Corp EXC.N for at least 20 billion CFA francs ($41.71 million) in its first direct sale to the market, Mines Minister Mohamed Abdoulahi said.

The sale, announced on state television late on Monday, is the first to bypass French state-controlled nuclear group Areva CEPFi.PA, which agreed a few weeks ago to give Niger 300 tonnes of uranium in 2007 to sell on the open market.

Areva operates both Niger’s existing uranium mines, located in the Saharan north, and the company has to date exported the entire production, paying the government a fixed royalty per tonne.

Areva’s 36-year-old monopoly has been under pressure from the Niger government, which has accused Areva of backing Tuareg-led rebels and banned the company’s top in-country official from its territory as it continues to hand out prospecting licences to mining companies from other countries.

Niger produced around 3,500 tonnes of uranium concentrate -- known as yellow cake in the trade, and containing around 75 percent uranium metal -- in 2006, but the mines ministry expects output to double in the next four years as two new mines open.

Niger’s uranium output is around 7.5 percent of world production and it is the third biggest supplier to the EU after Russia and Canada.

Abdoulahi said the first 100 tonnes would be transferred to Exelon by the end of the year, and the rest in early 2008.

“Today we have just started ... but Exelon and we share a desire that this will continue in future years,” Abdoulahi said.

Rebels led by light-skinned Tuareg nomads in Niger’s Saharan uranium mining area launched an insurgency in February demanding more investment in the area’s development and a greater share in its mineral revenues -- the main source of income for the central government based in the southern capital Niamey.

The government has accused Areva of paying army deserters who joined the rebellion, a charge the company denies.

In the midst of the dispute the company renegotiated its contract with the government late in July, agreeing to raise the royalty it pays Niger to 40,000 CFA francs a kg from 27,300 CFA, effective from the start of 2007.

Niger’s government said the company had also agreed to pay it a 15 billion CFA franc advance on dividend payments, in addition to giving it the 300 tonnes of uranium to sell on the open market for its own benefit.

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