24 hours ago a coup occurred in this desolate and poor country, so why should I even care?

Markets, banks and schools in Niger’s capital opened as usual on Friday, a day after troops ousted President Mamadou Tandja in a military coup, and the only soldiers on the streets were few and lightly armed.

The international community unilaterally condemned the overthrow, but diplomats and analysts said it could create an opportunity to hold elections that were postponed by Tandja’s unpopular constitutional reform in 2009.  This sound vaguely familiar with the deposed leader of Honduras that the US tried to back and eventually failed.

But who cares about Niger?

The coup operation was led by Colonel Abdoulaye Adamou Harouna, who commands Niger’s standby force for West African regional bloc ECOWAS, military sources said.  As far as coups go it was tame as only three persons died in a gun battle.

But why should I care about some landlocked country in Africa?

Have you ever heard the phrase… follow the money?  One only needs to see who the major players and/or investors of late that have been to understand why. Despite political turmoil over the last year, Niger has attracted billions of dollars in investment from major international companies, including French nuclear giant Areva and the China National Petroleum Corp (CNPC), who are looking to tap into uranium and oil reserves, respectively.   I have written about these two companies previously and they aim to corner the markets in these undeveloped countries.  The  CNPC has been buying up oil holdings in African countries for the past several years to the point they have become on of the dominant players in the region.  With China’s growing economy, it needs to find cheap oil and uranium deposits to keep its economy from tanking.  Areva is a dominant nuke builder/player and in France 80% of all it electricity is generated from nuclear plants.  To review my previous article about the Chinese oil companies expansion into Nigeria, which is the country directly north, click here.

So what’s the importance of Niger?

Niger is a developing country.  Much of the non-desert portions of the country are threatened by periodic drought and desertification.  The economy is concentrated around subsistence and some export agriculture clustered in the more fertile south, and the export of raw materials—especially uranium ore. Niger remains handicapped by its landlocked position, poor education, infrastructure, health care, deserts, poverty and environmental degradation.  All conditions needed to mine uranium cheaply and drill for oil!

With a new military government installed it will quickly need to pay its troops or face another coup from within.  Enter Areva and CNPC.  With a ready available cash commodity it can offer sweet deals to these two giants for the rights to mine oil and Uranium in exchange for an instant cash infusion.

According to a report published by the World Nuclear Association in April of 2007, Niger is the world’s third- to fifth-ranking producer of uranium.  Bingo folks here is the key to Nigers importance!  In an ever increasing nuclear economy, the ability to get your hands on cheap Uranium will be paramount to the economic engines of the world’s countries.  Keep in mind 80% of Niger is covered by the Sahara Desert and the annual income per capita is around $300 US.  The opportunities to get at this ever increasing and important ore is paramount to nuclear countries that run on Nuclear Power.  And to the stability and fortune of whoever runs and controls Niger!

So why is the CNPC involved?

Niger is Africa’s major oil producer, with about 85% of that nation’s revenue derived from oil exports. Five international oil companies, including Exxon Mobil, Chevron,Shell and CNPC, pump oil in Niger.  Output is estimated between two and three million barrels a day.  However, that varies due to political instability in the oil-producing region…the Niger delta, where insurgents frequently attack production and pipeline facilities.  The nation also exports uranium, gold and coal.

China will invest $5bn (£2.5bn) over the next three years to develop oil production in Niger.  State-owned China National Petroleum Corp (CNPC) is expected to produce the country’s first barrel of oil in 2009.  Under the agreement, CNPC will build a 2000-km pipeline and a refinery with a capacity of 20,000 barrels a day.

The price of oil spiked on the New York Mercantile Exchange, in part, due to the Nigerien coup. Crude prices also went higher after the Energy Information Administration reported that U.S. supplies of heating oil fell by 1.4 million barrels, although crude inventories increased by 3 million barrels. The price of crude oil on the New York exchange closed at $79.06 a barrel, up $1.73.

A military coup in Niger just cost you a few cents more at the gas station this morning.  What did we get from the Clinton State Department? 

“While the United States does not condone the use of violence, clearly we think this underscores that Niger needs to move ahead and with the elections and the formation of a new government,” State Department Spokesman Crowley said.

If you remember when Honduras legally outed Manuel Zelaya in Honduras (read my previous article) for trying to re-write the constitution to allow himself another term, and the Obama administration did all it could to put the Hugo Chavez leader back into power.  Now the same thing happens in Niger and the State Department calls for new elections.  Not one word condemning the coup!  What a two-faced response!

While the Obama administration is making comments about oil and nuclear development in the US, foreign companies are cornering the market in every corner of the globe to stay ahead. 

When a military coup affects your at the gas pump the next day, its worthwhile to find out why.  When Obama wants to go nuclear, watch every uranium mining concern grab every bit of turf to control the price and drive the price up.  Its no secret the DeBeers has owned the diamond business for decades and if uranium becomes vogue, watch for more coups to occur in regions where its mined.  If indeed the US gets back into the Nuclear Power plant business, watch how uranium companies across the globe try and grab all the ore they can, and don’t think this will be the last coup we see in a uranium rich environment.  Uranium just become the new “Black Gold” in the world this week.

Follow the money!

Visit my website and help me make the change to return Congress to the people. www.PaulSmithforCongress.org

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Additional headlines regarding Uranium in Niger.  This coup was not small thing.

Korea Resources Corp secures uranium source in Niger

On March 19, 2009, Korea Resources Corporation (KORES) announced that it has signed a memorandum of understanding with African country Niger to import an annual 400 tons of uranium used for nuclear power. The promised annual 400 tons comprises 10 percent of the uranium used at home for a year. The state-run company also plans to buy a five-percent stake in a uranium mine being developed by Niger. (Chosunilbo Mar 20, 2009)

Further Indian company granted uranium exploration permits in Niger

The Earthstone group , a diversified multinational group headed by non-resident Indian Pankaj Shah, has, through its wholly-owned subsidiary Earthstone Uranium FZE, entered into an agreement with the Government of the Republic of Niger, whereby the Republic of Niger will grant Earthstone Uranium four exploration permits for uranium and associated elements. The four permits totalling about 2,000 sq. km. are part of the Tim Mersoi sedimentary basin. These permits in Niger are in regions now producing uranium, including the Akouta underground mine and Arlit open pit mine operated by Areva. (The Hindu Dec. 3, 2008)

Chinese uranium mining interests to revamp Niger’s power supply

Niger government has sealed a deal with China to upgrade the country’s power supplies. Niger which sources most of its power from Nigeria had several black outs since January due to systems collapse in Nigeria. In the deal aimed at improving Niger’s power supplies, China – which is currently the main investor in uranium mining in the country – will transfer electrical power units to Niger. Niger’s head of power plant in capital Niamey Mr Hamidu Mamudu, said the new equipment would help increase production of electric power by about 30% for the Niamey region saying equipment will also increase power output between 50 and 60 megawatts. (afrol News, 7 July, 2008)

Niger to award 100 exploration permits to ramp up uranium industry

Niger Energy and Mines Minister Mamadou Abdulahi said that the country will award 100 mining exploration permits over the next two years. State-controlled French utility Areva has enjoyed a monopoly on production of uranium in Niger for some 40 years. In recent years, the government has issued a slew of new exploration licences in an effort to diversify the uranium sector. (Resource Investor Jan 10, 2008)

Indian company granted uranium exploration and mining permit in Niger

Taurian Resources Pvt Ltd. has recently won a contract which gives it exclusive rights over 3,000 sq. km. of the Sahara Desert known to be rich in deposits of uranium. According to the estimates of the Managing Director of the company, Sachin Bajla, the area in the Arlit region is likely to hold at least 30,000 tonnes of uranium. This is the first time any Indian has won a contract for uranium exploration and mining anywhere in the world.

Niger is not a member of the Nuclear Suppliers Group, the 45-member nation that controls all nuclear-related commerce, and hence it should be easy for India to access the uranium once the mines become operational – this will take several years. (The Hindu Aug. 19, 2007)

Chinese uranium prospector captured in Niger by Tuareg rebels

A Chinese employee of a mining company was captured on July 6, 2007, by Tuaregs of the rebel Movement of Niger People for Justice (MNJ) in the Ingall region 100 kilometres south of Agadez, the movement said. According to the Niger government, the Chinese national worked with a team prospecting for uranium. (The News July 7, 2007)

The Chinese company has suspended its activities in the country. The kidnapped employee was released on July 10, 2007. (Reuters July 10, 2007)

Niger to triple uranium production in the next few years

Niger communication minister and government spokesman Mohamed Ben Omar has said his country plans to raise its annual uranium production from 3,500 to 10,500 tonnes a year in the next few years. Speaking at a news conference, Omar said French group Areva will remain Niger’s strategic partner in uranium exploitation.

Reacting to statements by non-governmental organisations (NGOs) on the health and environmental consequences of uranium exploitation in northern Niger, he said Areva plans to invest about 540 billion francs CFA [US$ 1.1 billion] in the well-being of people living in the affected area. (Africast May 3, 2007)

Imouraren project

 In Niger,  Areva should invest 1.2 billion euros ($1.7 billion) in the Imouraren project, scheduled to come on stream in 2012. The project is already delayed a year because of political turbulence in the country. “We will decide in 2011-2012 whether we should scale it for 2,000 tons or 5,000 tons or even 7,000 tons,” Sébastien de Montessus, director of Areva’s mining business unit said. The current uranium price (US$ 55 / lb U3O8) wouldn’t be enough to make an investment of $500 million to $1.5 billion profitable, De Montessus said. “The market price has to go up to $70 to $80.” (Bloomberg June 23, 2009)

On May 4, 2009, the foundation stone was laid for the Imouraren uranium mine project. (AFP May 4, 2009)

On Jan. 5, 2009, Areva announced the receipt of a licence to operate the Imouraren mine. Mining is due to begin in 2012.

On July 31, 2008, Areva announced the receipt of the environmental approval for its Imouraren uranium mine project. The approval is part of the documentation for the exploitation permit applied for by Areva on May 15, 2008.

On Jan. 13, 2008, Areva announced it has received government agreement to launch mining at the Imouraren deposit and to extend its exploration scope. With a planned investment of over 1 billion euros (approximately 650 billion FCFA), the Imouraren site will constitute the biggest industrial mining project ever under consideration in Niger, placing it at the second world rank with almost 5,000 tons of uranium produced annually.

Heavily-armed men attacked a camp of uranium prospectors in northern Niger early on Apr. 20, 2007, killing a security guard and wounding three other people, industry sources said. Some 20-30 men demanding a better deal for local Tuareg people raided the camp operated by the French nuclear energy group Areva housing around 250 people and made off with six vehicles and a large number of mobile phones. The raid took place at Imouraren, 85 kilometres south of the main uranium-producing centre of Arlit, the sources said. The gunmen said they belonged to a group called the Niger Movement for Justice, which emerged in February 2007. They called for the proper implementation of a 1995 accord which ended a Tuareg rebellion by promising the tribesmen priority in jobs with local mining companies. (AFP Apr. 20, 2007)

Areva may begin producing 4,000 tonnes of uranium a year starting in 2011 from a deposit located in Imouraren, said Mohamed Abdoulahi, Minister of Mines and Energy. The Imouraren deposit contains 146,000 tonnes, one of the world’s biggest. Areva’s project will cost as much as 500 million euros, said Oumarou Massalbi, director of mines at the ministry. (The Standard Mar. 8, 2007)

Azelik deposit (Teguidda deposit), Agadez region

Sinohydro Corp. , China’s leading hydraulic construction contractor announced it has secured a 140 million U.S. dollar uranium mine construction deal in Niger with China Nuclear International Uranium Corp. (SinoUranium). The contract calls for building a uranium mine with annual output of 600,000 tons, a coal-fired power plant and a hydrometallurgy plant in the African country, Sinohydro said in a statement on its website. The construction will last 900 days. (People’s Daily Online Apr. 8, 2008)

On Nov. 9, 2007, the government of Niger granted Société des Mines d’Azelik (SOMINA) a mining license for the Azelik uranium deposit. SOMINA was formed on June 5, 2007, by the state of Niger and its Chinese partners. On June 19, 2007, the company applied for a mining license for the Azelik uranium deposit. The application was accompanied by an environmental impact study which was approved in July 2007, and a technical-economical feasibility study. The license was granted, after the latter study had been modified, as requested by the authorities. (Tamtaminfo Nov. 9, 2007)