In the summer of 2007, the government of Niger and the French nuclear group Areva reached a critical point in their dispute over the mining of Niger’s uranium deposits when, on July 25, the government expelled the Director of Operations for Areva in Niger from the country. The expulsion was preceded by months of escalating tensions between the two countries, which had been aggravated by popular opposition to Areva and rebel attacks on mining facilities.

Following the dispatch of a high-level diplomatic mission from Paris, Niger and Areva finally reached a new agreement over uranium mining rights. This agreement has emboldened Niger’s central government to seek out new partners for uranium mining, among them China and India. Critics have charged that China has extended military aid to Niger in return for rights to uranium. At the same time, India’s new quest for uranium raises potential proliferation concerns that will likely persist into the future.

Background
Niger is the fourth-largest uranium producing country in the world, ranking behind Canada, Australia, and Kazakhstan. In 2006, production reached 3,400 tons of natural uranium oxide concentrate (also known as “yellowcake”), accounting for approximately 9 percent of world production. [1] In April 2007, Niger’s central government announced that it aims to expand production to roughly 10,500 tons per year, which, if achieved, would place Niger’s uranium production on a par with Canada, currently the world’s largest uranium producer. [2] At present, Niger has two active mining operations, Cominak and Somaïr, which were established as joint ventures between the government of Niger and Areva, a French public multinational industrial conglomerate whose main stakeholder is the French government. [3] Following Niger’s independence from France in 1960, the French government signed an agreement with Niger whereby Areva received a de facto monopoly over Niger’s uranium resources. The agreement granted Areva controlling stakes in Cominak and Somaïr, preferential treatment in uranium prospecting, and the ability to purchase uranium below the global spot market price. [4]

Due to its substantial uranium resources, Niger has had obvious strategic value to the French civilian nuclear industry and military nuclear program. Uranium oxide from Niger accounts for 43 percent of Areva’s total supply and roughly one quarter of the uranium needed annually for nuclear electricity generation in France. [5] French President Nicolas Sarkozy confirmed the importance of Niger to the French nuclear weapons program on July 27, 2007, during a visit to Gabon, when he stated, “Niger is a very important country for us since it is a major producer of uranium used for military purposes.” [6] The revenues from exporting uranium are critical for Niger, which currently ranks last on the United Nations’ Human Development Index. [7] Uranium is by far the country’s largest export, accounting for nearly 70 percent of Niger’s total exports. [8]

Tensions Between Areva and Niger
In light of the growing global demand for uranium, Niger recently sought to renegotiate the terms of its agreement with Areva. Pegged to receive only $60 per kilogram under the agreement (spot price on the open market as of October 2007 is $184 per kilogram), the government of Niger wanted a higher price for its uranium as well as the ability to diversify its mining operations among companies from several countries. Areva, on the other hand, feared losing ground in a country vital to the French nuclear industry. These fears were partially realized when Niger agreed in 2006 to allow the Chinese National Nuclear Corporation (CNNC) to develop the Abokorum deposit, which is believed to contain 12,790 tons of uranium. [9]

Additionally, domestic turmoil in Niger escalated tensions between the Nigerien government and the French conglomerate. In February 2007, a rebel group known as Le Mouvement des Nigeriens pour la Justice (MNJ), consisting primarily of Tuareg dissidents, was formed in northern Niger. Because the Tuareg people hold historic ties to Niger’s Agadez region, which is also home to the two Areva-controlled uranium mines, the conflict between the MNJ and the Niger central government has also involved Areva. The Christian Science Monitor quoted the MNJ’s spokesman Seydou Kaocen Maiga as saying, “For 40 years, Areva has extracted uranium while giving nothing to the people of the north.” [10]

To protest government policies, poor economic conditions, and perceived government corruption, the MNJ launched a number of attacks on government, military, and infrastructure targets in 2007. On April 20, the MNJ attacked a camp used by Areva, killing one individual and shutting down production for over a month. [11] Following the attack, Areva reached an agreement with Agidar Mohammed, then a captain in the national forces of Niger, to protect Areva’s assets in the country. [12] A former rebel who joined the national armed services following a 1995 peace agreement between Tuareg rebels and the central government, Captain Agidar proceeded to desert the national forces and join the MNJ in June 2007, sparking accusations from the central government that Areva had directly financed the rebel group. [13]

The President of Niger, Mamadou Tandja, suspected cooperation between Areva and the MNJ, declaring that “this alleged support of Areva to the MNJ aims to prevent other competing companies from exploiting uranium in Niger.” [14] In addition, Iboun Gueye, head of the Niger Government Communications Unit and editor-in-chief of state television, declared on August 18, “This is a strategy used by interest groups who use armed groups to further weaken poor states, and above all to reduce their room for maneuver during economic negotiations.” [15] Reacting to the Nigerien president’s statement, the chairwoman of Areva, Anne Lauvergeon, rejected these claims and denied any involvement of her company in support of the MNJ. [16] Regardless of either side’s true intentions, the confrontation between Areva and the Niger government reached a climax on July 25, when the government of Niger expelled Dominique Pin, Director of Operations for Areva in Niger, from the country. [17]

Niger and Areva Resolve Their Differences
Following Pin’s expulsion from Niger, the resolution of the disagreements between the Niger government and Areva became a high priority for the French government. On July 27, French President Nicolas Sarkozy expressed his desire for a quick resolution of the dispute and dispatched French Foreign Minister Bernard Kouchner to meet with Aichatou Mindaoudou, the Foreign Minister of Niger. [18] Following a visit of the French Secretary of State for Cooperation Jean-Marie Bockel to Niger, Areva and the government of Niger finally reached an agreement to extend Areva’s control of Cominak and Somaïr through at least the end of 2007. Among the details of the agreement was a nearly 40 percent increase in the royalties paid to the government of Niger, which will now receive $83 per kilogram of uranium retroactive to January 2007. [19] Furthermore, according to reports, the deal also ends Areva’s preferential treatment in acquiring permits for uranium prospecting. [20] To this end, Mindaoudou issued a statement on August 5, declaring that “Niger is determined to implement a policy of diversification of its partners, which means the end of the monopoly that Areva has had in our country.” [21] Before the renegotiation, Niger had already started to diversify its uranium partners. The terms of the new agreement have encouraged Niger to accelerate this process, and it has issued over 90 new uranium mining exploration permits to a host of countries. [22]

Despite the official settlement, however, popular resistance to Areva in Niger has continued. On September 8, thousands of Nigeriens marched on the capital demanding that Areva leave the country. [23] To improve its standing in the country, Areva has pledged aid—over $1 billion, according to some sources—to improve social and environmental conditions in Niger’s Tuareg regions. [24] The French government has also offered assistance to the Nigerien government to remove landmines from conflict zones. [25] Despite such outreach efforts, popular opposition to Areva in Niger and the broader conflict between the Nigerien government and MNJ show no signs of ending. However, details have been slow to emerge, as outside experts have noted a systematic, government-led crackdown on press freedoms in the country. [26]

China Explores Uranium Mining in Niger
The tensions between Areva and the government of Niger have opened the door for states seeking uranium for their burgeoning nuclear energy programs – namely, China and India. It is known that China is seeking to expand its nuclear energy capacity to meet exponential growth in domestic energy consumption. [27] Because China has encountered limitations on its domestic uranium mining operation, some experts estimate that “Niger presents the most promising source of uranium to fuel China’s program to dramatically increase its use of nuclear power.” [28]

China began developing two mining sites in Niger’s Agadez region in 2006, and production was scheduled to begin by 2010. [29] However, like Areva, Chinese corporations exploring uranium mining were subject to disruption by elements of the MNJ. In July 2007, the MNJ kidnapped Zhang Guohua, an executive of mining operations at China Nuclear International Uranium Corporation (Sino-U), in a bid to frighten foreign firms working in the region. [30] Although the executive was later released, the CNNC subsidiary responsible for developing the larger of the two mining sites has since suspended operations. [31] The potential for further conflict is real, as rebel groups have accused the Chinese government of providing weapons (including helicopters) to the central government in exchange for the uranium privileges, although Niger’s government disputes these allegations. [32] However, given the significant potential of China’s investment in Niger’s uranium resources, it remains to be seen how long this unrest will keep Chinese prospectors away.

India in Niger: A Proliferation Risk?
Like China, India has a growing need for uranium. [33] In particular, Indian nuclear planners have determined that, to expand the country’s nuclear energy sector and simultaneously maintain adequate uranium supplies to support its nuclear weapons program, India will need to import significant quantities of uranium. [34] Unlike China, however, India is subject to a nuclear trade ban, including a ban on transfers of uranium, imposed by the principal nuclear supplier states, acting through the 45-member Nuclear Suppliers Group (NSG). Specifically, since 1992, the NSG has barred nuclear transfers to states deemed to be “non-nuclear weapon states” under the nuclear Nonproliferation Treaty (NPT) that refuse to renounce nuclear weapons by placing all of their nuclear facilities under inspection by the International Atomic Energy Agency (IAEA). [35] Because India did not detonate a nuclear explosion before the January 1, 1967 cut-off date established in the NPT, it is considered a non-nuclear weapon state under the treaty, and New Delhi’s refusal to accept across-the-board IAEA inspections has made it subject to the NSG embargo rule. (Although China also possesses nuclear weapons, it is not subject to this rule because it detonated its first nuclear explosion before the January 1, 1967 deadline.) [36]

Pursuant to a July 2005 agreement with the United States, India is in the process of seeking an exemption from the NSG rule, although opposition to the nuclear cooperation deal in India appears to have sidelined the initiative until India holds elections in early 2009. [37] In the meantime, however, India may be able to bypass the NSG rule by dealing directly with Niger, which is not a member of the group and is not bound by its embargo. Nigerien sales to India are not known to have been an issue in the past, presumably because France, which is an NSG member, had effective control over the output from Nigerien uranium mines and chose not to export to India.

In August 2007, the Indian firm Taurian Resources Private Limited acquired a permit from the government of Niger giving it exclusive rights to the Arlit region, which the company estimates contains over 30,000 tons of uranium. [38] Pallava Bagla, an Indian correspondent for Science magazine, hailed the development, declaring it “a bold and courageous move [which] promises access to literally unlimited amounts of uranium.” [39] Contrasting the Niger agreement with possible nuclear cooperation between India and the United States, Bagla argued that “it should be easy for India to access the uranium [in Niger] once the mines become operational” because Niger is not a member of the NSG. [40] It is possible, however, that Niger, to avoid a collision with the major suppliers, made its agreement with India contingent on a change in the NSG rules, an approach taken by another major uranium supplier, Australia. [41]

Although it is outside the NSG, Niger is a party to the NPT. The provisions of that treaty are less stringent than the NSG rule and permit nuclear sales to India and similarly situated states provided that the exported material itself is subject to appropriate IAEA monitoring and is not used by the recipient for nuclear weapons. Presumably, Niger would insist on, and receive, such guarantees from India. Nonetheless, uranium purchases from Niger would allow New Delhi to use the imported material for peaceful purposes, while reserving domestic uranium resources for the Indian nuclear weapon program.

Conclusion
The increasingly dynamic situation regarding Niger’s uranium resources raises a number of concerns. The growing global demand for nuclear energy has bolstered the price of uranium on the international market, prompting Niger’s central government to seek out new mining partners and greater returns on its most valuable natural resource. Niger’s highly publicized falling out with Areva illustrates the vulnerability of nations dependent on nuclear energy to the volatilities of less developed nations. For its part, China’s involvement in Niger is indicative of its growing international presence, as it acquires natural resources to fuel its accelerating economy. In Africa, some fear that this role will assume a “neo-colonial” nature, under which China cooperates with governments most capable of protecting its investments, regardless of human rights issues. [42] Most troubling, however, is that increased foreign involvement in Niger’s uranium sector potentially poses problems for international nonproliferation efforts. Because Niger is not a member of the NSG, it is possible that Niger could choose to export uranium to India, Israel, and Pakistan, all currently embargoed by that group or to new states of proliferation concern that the NSG may subject to special controls in the future. India’s recent agreement with Niger provides such an example of potential erosion of nonproliferation rules.

Khalid Hilal – Consultant and Adam P. Williams – Monterey Institute James Martin Center for Nonproliferation Studies