Regime Change in Niger Prompts Audit of Mining Contracts

Print This Post | #stafBlock { position: absolute !important; z-index: 100000; display: none; width: 200px; } #stafForm { background-color: #ffffff; border: 1px solid #c6c6c6; padding: 5px; margin:0; } #stafForm h2 { margin: 0; } #stafForm input, #stafForm label, #stafForm h2 { font-family: 'Lucida Grande', Verdana, Arial, Sans-Serif; font-size: 1em; color: #222222; } #stafForm input { width: 90px; height: 15px; margin-top: 5px; border: 1px solid #ccc; } #stafForm label { float: left; display: block; width: 90px; line-height: 16px; } #stafClose { float: right; margin-right: 5px; } Email This Page: Topic: Uranium Mining Stocks — March 21st, 2010

The new military government in Niger has decided to instigate an audit of the mining contracts starting with the uranium and gold sectors, which usually means that they would like a larger share of the cake. Companies such as Areva SA and Semafo Incorporated operate in Niger and no doubt will be concerned as to how these changes will impinge on their operations.

Niger, the world’s sixth-largest uranium producer, will review mining agreements with companies including Areva SA to ensure they’re fair to the West African country, a mines ministry official said.

Minister of Mines and Energy Souleymane Mamadou Abba, appointed by Niger’s military rulers on March 1, hasn’t yet set a schedule or format for the audit, Mahaman Laoun Gaya, an official at the ministry and a former government minister, said by phone today from the capital, Niamey.
“The military authorities have decided to audit all the uranium and gold contracts,” Gaya said. “These are the most important ones to look at. The new government has only just taken office, so we don’t have any details yet.”

Niger made up about 6 percent of world uranium output in 2008 and it may reach 9 percent by 2015, BMO Capital Markets analyst Edward Sterck wrote in a Feb. 19 note. Most of the output is managed by Areva, which is investing 1 billion euros ($1.36 billion) in its third mine in the country, he wrote.

Salou Djibo, a squadron leader in the military, on Feb. 18 overthrew President Mamadou Tandja, who changed the constitution to allow himself a third term in office. The military junta hasn’t set a date for the democratic elections it promised.

Areva, the world’s biggest supplier of nuclear reactors, “is ready to meet the Nigerien authorities if they wish to review the mining agreements signed with their government,” the company said in an e-mailed response to questions.

‘No Problem’

Chief Executive Officer Anne Lauvergeon said March 4 that Niger’s president “clearly stated that there was no problem” with Areva. “My understanding is that some announcements have suggested that certain mining permits, with other companies, were not established in a completely transparent way.”

Nigerien transparency campaigner, the Network of Organizations for Budgetary Transparency and Analysis, on March 12 called for a review of all mining and oil deals in the country. The group “strongly recommends a commission of inquiry on the mining and petroleum contracts as soon as possible,” it said in an e-mailed statement.

Canadian gold producer Semafo Inc. operates the Samira Hill mine in Niger, which produced 56,900 ounces in 2009, Jean-Paul Blais, the company’s vice-president of corporate affairs, said by phone from Montreal, Canada today.