Exclusive: France's Orano says its Niger uranium mine on verge of bankruptcy

Reuters

4 days ago

DAKAR, July 2 (Reuters) - French uranium miner Orano said on Wednesday its majority-owned joint venture with Niger, SOMAIR, is on the verge of bankruptcy as a result of export restrictions imposed by Niger's military government.
Orano was forced to suspend production at SOMAIR after authorities halted exports last year. Niger's government seized the operation in December and announced plans to nationalize it last month, joining a wave of West African governments seeking greater control of natural resources from foreign companies.
Niger, which also exports gold and coal, is the world's seventh-largest uranium producer. The country accounted for about 15% of Orano's uranium supply when its local unit operated at full capacity.
Orano told Reuters in emailed responses to questions that it had been flagging SOMAIR's worsening financial position since October as its year-long dispute with the West African nation escalated.
"The Nigerien authorities' insistence on continuing production expenses at any cost has led to the current situation where the SOMAIR company is on the verge of bankruptcy," Orano said.
Niger's Ministry of Mines did not immediately respond to a request for comment on Orano's assessment of the unit's financial position.
In its decision to nationalise the mine, the junta, which seized power in 2023, said Orano had been extracting 86.3% of uranium production since 1971 despite holding a 63% stake in the mine.
The country's main mineworkers union, which said production will continue at the mine, said Orano had carried out acts of sabotage, adding Niger's uranium exploitation had not fairly benefited the country. Orano denies the accusations.
Orano said Niger's state-owned partner SOPAMIN had engaged in opportunistic behavior by refusing to take its share of production during low uranium price cycles to avoid losses.
"The State of Niger did not always exercise its offtake rights for several periods... particularly in low uranium price cycles", forcing Orano to purchase additional uranium above its shareholding to keep the mine financially viable, the company said.
Orano said it wanted the venture's remaining financial resources to be used to pay employees' salaries and to maintain industrial facilities.
Uranium spot prices are up 7% so far this year, having hit a seven-month high of $79 a pound last week.
The company, which said it reserves the right to legal action, did not specify its next steps as Niger moves forward with nationalization plans.
Neighbouring military-ruled Mali has also put Barrick's (ABX.TO), opens new tab Loulo-Gounkoto gold complex under state control, while Burkina Faso and Guinea have pressed Western miners for greater mining share while pivoting to Russian interests.