Areva signs uranium deal with Niger
While the French nuclear group agreed to a reduction in tax breaks, its production will be delayed.
NIAMEY - French nuclear group Areva agreed to a reduction in tax breaks and a rise in royalty rates at its uranium mines in Niger on Monday but said the start of production at its giant new Imouraren mine would be delayed until prices improve.
Under the terms of a long-awaited deal to renew its production agreements in Niger, the state-owned French company also agreed to pay €90 million to rebuild the road to its mines in the northern town of Arlit and to invest €17 million in a local development project.
Acceding to pressure from President Mahamadou Issoufou's government, Areva pledged to build a new headquarters for its mining operations in the capital Niamey at a cost of €10 million.
It also committed to naming Niger nationals at the head of its two mines in the country - Somair and Cominak - by 2014 and 2016 respectively.
Areva and Niger have been locked in talks for two years but failed to reach a deal before the previous 10-year production agreement expired on 31 December, requiring its temporary extension.
Niger, the world's fourth-largest uranium producer and one of the world's poorest countries, won its battle to extract higher tax payments from the French group under the terms of a 2006 mining law that reduces exemptions and raises royalties rates.
Under the new deal, which lasts for five years, Areva's rate of mining royalties - a tax based on the market value of the minerals produced - will rise from a current level of 5.5 percent to as high as 12 percent depending on profitability, under the terms of the 2006 law.
Areva had long argued this would make its mines in the West African country unprofitable.
Somair and Cominak together produce more than 4,000 tonnes of uranium a year.
"The two parties will take the necessary steps to ensure the economic and financial profitability of these companies and to safeguard employment," read a joint press statement issued after the signing.