Niger military coup good for uranium? Posted: February 19, 2010, 11:33 AM by Eric Lam Uranium, Mining, Areva, Niger A bloody military coup is "potentially positive" for uranium prices, a note from Edward Sterck with BMO Capital Markets says.
"Tensions have been high" in the African country of Niger since its president, Mamadou Tandja, dissolved parliament to stay in office, he said. Mr. Tandja has since been kidnapped by soldiers with the Supreme Council for the Restoration of Democracy, after a pitched gun battle through the streets of capital city Niamey ending at the presidential palace.
"Whilst military coups are not new to Niger, a possible risk is that the country's new leaders might be tempted to interfere with uranium production or place extra demands on producers," Mr. Sterck said. "Market uncertainty may result in a boost to the spot price of uranium if nervous utilities move to increase inventories."
Most of the current production is managed by Areva, a French energy company that is in the process of investing 1-billion Euros into a third mine in Niger. The company's mines have survived the many previous coups and two rebellions in the country.
Niger is the world’s sixth-biggest producer of uranium, after Canada, Australia, Kazakhstan, Russia and Namibia, according to the Luxembourg-based Euratom Supply Agency. Paris- based Areva SA, the world’s largest supplier of nuclear reactors, plans to start operating the Imouraren mine in Niger’s northern Agadez region in 2012. The site will produce 5,000 metric tons of uranium annually, doubling the country’s output.
Julien Duperray, a spokesman for Areva in Paris, said the company would not immediately comment on the situation.
Niger produced about 7 percent of the global uranium supply in 2008 and its share will increase to about 10 percent by 2015, Max Layton, an analyst at Macquarie Bank Ltd. in London, said by phone.
“It’s very important, it’s a very concentrated market on the supply side,” Layton said. “Areva has been operating in Niger via a couple of its holding companies for well over a decade. They’ve managed to survive things like this in the past in Niger. I’m not sure there has been an event where production has been significantly affected historically.”