In the Sahel region of Africa, political instability and corruption has run rife since decolonisation from European nations. Arbitrary borders were drawn without the consideration of who they will affect. Fuelling civil wars, coups and resistance, making this region a hotbed for conflict for decades. The youngest country in the world, South Sudan was a result of these borders being drawn, combining vastly different people groups.
As a whole the continent of Africa and the borders within it can be seen as a scar left behind from its colonial past. However, these scars have not yet healed leading to conflicts we hear about all too often in our modern day. In the past 9 months there have been coups in Burkina Faso, Niger and Gabon. For this article I will be taking a look at how the recent coup in Niger will affect the uranium supply chain and France’s dependency on of Niger’s uranium.
Recent Coup in Niger Unveils Uncertainties
On July 26, 2023, Niger experienced a seismic political shift as a coup d’état unfolded, leading to the detention of President Mohamed Bazoum and the rise of General Abdourahamane Tchiani as the head of a new military junta. Like the African Union, the European Union and the United Nations, ECOWAS is calling for the release of President Bazoum, who has been under house arrest since the coup.
Military force has been spoken by ECOWAS members in particular Nigeria and Ghana, there is still hope this can be settled diplomatically. French President Emmanuel Macron said France will respond immediately to any violence against French interests in Niger following the coup with The French government re-emphasizing that they “will not tolerate any attack on France and its interests” in Niger.
France’s Historical Ties and the Role of Orano
What this interest might well be for France in Niger is uranium. France’s colonial past casts a long shadow, intertwining its fate with former colonies. In this context, Niger’s role in France’s nuclear ambitions is a crucial one. Orano (previously known as Areva) is a 90% state-controlled French nuclear fuel producer.
They operate three uranium mines in Niger, a resource vital for fuelling French nuclear reactors. These mines, including Aïr mines have been in operation since 1971, Akokan site undergoing redevelopment, and Imouraren mine on hold due to market conditions, highlight France’s intricate dependency on Niger’s uranium. For over 50 years the uranium in Niger has been mined exclusively by Orano.
Industry Implications Amidst Political Unrest
The military coup in Niger has stirred concerns over the stability of uranium supply, raising questions about its impact on France’s energy landscape. Orano’s commitment to maintaining mining activities amidst the political turmoil offers a degree of reassurance. While Niger contributes 20% of France’s uranium imports, its global uranium production share remains relatively modest at 4%. Other significant uranium producers like Kazakhstan, Canada, Namibia, and Australia collectively shape the global market.
Orano’s monopoly on Niger’s Uranium supply
The role of the uranium supply chain might seem irrelevant to a coup. However, a series of issues regarding the fairness of Orano’s business operations in Niger has been a hot topic within the country since the turn of the millennium. Notably, Niger is seeking to raise the royalty rate to 15%, which appears reasonable when compared to Australia’s 10%, Kazakhstan’s 19%, and Canada’s 13%, The leading exporters of Uranium.
Despite Niger being the world’s fourth-largest producer of uranium, accounting for 80% of its exports, the nation receives only 5% of its national GDP from this resource. Moreover, Orano’s lack of transparency regarding its profits in Niger, coupled with exemptions from export duties and various taxes, raises concerns about whether the company is adequately contributing to the local economy. The situation points to broader issues of fairness and equity in resource extraction agreements and the growing sentiment of anti-Western sentiments in African populism.
Despite renegotiated contracts in 2014, which aimed to secure a more equitable share of the wealth from uranium resources, there are lingering concerns about the actual benefits accrued by Niger. Key details of the agreements, such as expired agreements and audit confidentiality, remain undisclosed. The protest in Niamey underscores public demands for Orano to contribute more to taxes, especially given its significant profits. Notably, the decrease in Orano’s royalty payments by $5.3 million over five years, linked to uranium’s declining value, raises questions about fair compensation for Niger.
Moreover, the environmental cost is substantial, with pastoralist communities experiencing pollution’s harmful effects, underscoring the need for more stringent environmental standards and regulations, as seen in the US with the EPA but lacking in Niger, where Orano appears to prioritize cost savings over environmental responsibility. The extent of this pollution’s true cost, potentially reaching billions of dollars, remains uncertain but is a concerning aspect of Orano’s operations in Niger.
Complex Future Landscape and Diplomatic Negotiations
The coup’s repercussions reverberate beyond immediate uranium supply disruption. France’s energy security, entwined with Niger’s resources, is now at a crossroads. As Europe seeks to diversify its uranium sourcing, the Niger situation gains prominence. While immediate effects might be contained due to ongoing mining operations and existing stockpiles, long-term concerns persist. The instability in Niger could further complicate the EU’s diplomatic strategies, potentially impacting decisions related to Russia, a major uranium supplier.
Although Russia has been sanctioned by the EU due to the ongoing war in Ukraine. Most of these sanctions has been through economic trade between the two powers for the sale of natural gas and oil, which were a key import to fulfil the EU’s energy need. The sale of Uranium was not on list of resources sanctioned, due to Russia having a control over nuclear fuel. So, a sanction on this resource would’ve had a detrimental effect for countries using nuclear power, in particular France. However, the EU has been trying to find alternative countries to source nuclear fuel and lessen the dependence on Russia. Even if Niger is a smaller player in the EU’s Uranium portfolio a cut in ties will put pressure on finding new trade partners.
Final Reflections: Balancing Energy, Economy, and Ethics
The coup in Niger serves as a reminder of the intricate dance between energy demands, economic interests, and ethical considerations. While France’s dependency on Niger’s uranium for its nuclear prowess is undeniable, the situation exposes complex issues. The economic benefits for Niger in this resource partnership have been debated, with calls for greater transparency in the mining agreements.
As geopolitical shifts continue to shape energy landscapes, the coup underscores the urgency of finding sustainable, diversified energy sources. It raises the need for Europe to reconsider its uranium reliance and strategize alternatives, especially in light of potential disruptions. While Niger’s immediate influence on global uranium production is modest, its role in France’s nuclear journey highlights the nuanced and multifaceted aspects of energy interdependence on the global stage.
