Nuclear giant Orano loses control of uranium operations to junta

In the latest sign of a dramatic deterioration in relations, Niger’s military rulers appear increasingly determined to drive France out of any significant sector in their economy – and particularly uranium mining.

This week the French state nuclear company Orano announced that the junta – which deposed France’s ally, President Mohamed Bazoum, in a coup in July 2023 – had taken operational control of its local mining firm, Somaïr.

The company’s efforts to resume exports have for months been blocked by the regime and it is being pushed into financial crisis.

And the impact could be felt more widely – although Niger accounts for less than 5% of the uranium produced globally, in 2022 it accounted for a quarter of the supply to nuclear power plants across Europe.

So the timing could hardly be more awkward, as Western countries struggle to meet the challenge of climate change and cut their carbon emissions from electricity generation.

For French President Emmanuel Macron, already wrestling with political crisis at home, the potential departure of Orano from Niger is certainly awkward in image terms.

For it coincides with bruising news from other long-standing African partners – Chad has suddenly announced the ending of a defence agreement with Paris, while Senegal has confirmed its insistence on the eventual closure of the French military base in Dakar.

But in any case, the crisis facing Orano in Niger represents a significant practical challenge for French energy supply.

With 18 nuclear plants, totalling 56 reactors, which generate almost 65% of its electricity, France has been ahead of the game in containing carbon emissions from the power sector.

But the country’s own limited production of uranium ended more than 20 years ago.

So, over the past decade or so, it has imported almost 90,000 tonnes – a fifth of which has come from Niger. Only Kazakhstan – which accounts for 45% of global output – was a more important source of supply.

The continuing paralysis, or the definitive shutdown, of Orano’s operations in Niger would certainly force France to look elsewhere.

This should be achievable, as alternative supplies can be obtained from countries including Uzbekistan, Australia and Namibia.

Last year, as West African neighbours responded to the coup in Niger by imposing a trade blockade that paralysed uranium exports, other suppliers readily stepped into the breach.

The European Union’s imports of the mineral from the country plunged by a third, but these were largely replaced by Canada.

But there was also a politically awkward price to pay. EU imports of uranium from Russia rose by more than 70%, despite the heavy sanctions imposed on Moscow because of its invasion of Ukraine.

And of course, it is Russia which has become the new best friend of the military leaders who have seized power in Niger and its allied neighbours, Burkina Faso and Mali, since 2020.

Russian military contractors fight alongside the Malian army in its campaign against jihadists and ethnic Tuareg separatists, while they also help to protect the senior leadership of the juntas in Niger and Burkina Faso.

So although France, and Europe more generally, would be able to find ways to cope with a definitive loss of Niger’s uranium supply, the shift would not be entirely comfortable.

In the short-term at least, EU states would probably become more reliant on Russia and its central Asian neighbours, thus undermining their own effort to maintain economic pressure on President Vladimir Putin during a potentially crucial period in the Ukraine crisis.

Moreover, Niger’s regime, whose attitude towards the EU as a whole has become almost as mistrustful as its broken relationship with France, continues to seek alternatives to its old Western partnerships.

And Iran – a potential customer, of course, for uranium – has emerged as an option.

Contacts between the two governments have deepened, with Niger’s Prime Minister Ali Mahamane Lamine Zeine visiting Tehran in January. Rumours of a possible deal for the supply of uranium “yellowcake” (concentrate) briefly circulated a few months ago.

Meanwhile, the outlook for Orano’s hopes of restoring normal uranium operations and exports from Niger look dim, given the hostile attitude of the military regime in Niamey.

That antipathy is partly explained by Macron’s vocal condemnation of the July 2023 overthrow of Bazoum, who had been one of his closest African political and security partners.

Paris firmly endorsed the tough stance of the West African regional grouping Ecowas, and there were even rumours that it might have been ready to provide tacit support had the bloc ever gone ahead with its short-lived threat to intervene militarily in Niger to reinstate Bazoum.

In this poisonous atmosphere of hostility and mistrust, Orano was an obvious and convenient target for junta retaliation.

The French company’s predominant role in the uranium sector had for years fuelled resentment among many Nigériens, amidst claims that the French company was buying their uranium on the cheap, despite periodic renegotiations of the export deal. Although the mining operations only started years after independence, they were seen as emblematic of France’s ongoing post-colonial influence.

After last year’s coup, Orano itself tried to stay out of the diplomatic row, keep a low profile and carry on operating normally.

But the Ecowas trade blockade prevented it from exporting the output from the Somaïr mine, near Arlit, in the Sahara Desert.

And even after the sanctions were lifted in late February, the usual uranium export route, via Benin’s port of Cotonou, remained blocked, because the junta kept the border closed in an ongoing political row with Benin.

Orano offered to fly the uranium out, but the regime shunned this suggestion.

In June the junta cancelled the French company’s rights to develop a new mine at the large Imouraren deposit, which had been seen as the uranium sector’s principal new hope for future growth.

Meanwhile, the export blockage was pushing Somaïr, which by November was sitting on 1,150 tonnes of blockaded stocks of uranium concentrate worth $210m (£165m), into financial crisis.

And when Orano decided to halt further production and prioritise the payment of workforce salaries, relations with the government deteriorated further into this week’s almost total breakdown.

Of course, it is not just the company but also Niger’s economy that pays a price for this situation, in lost export earnings and risking hundreds of jobs.

For Arlit and other communities in the desert north, this would be a devastating blow, despite talk of revived activity at a Chinese mining project in the region and some interest in the sector among other potential partners.

But Niger’s junta feels no need to make concessions to Orano because it is now buoyed by a sharp rise in oil exports, thanks to a new Chinese-built pipeline.

With that financial cushion, the regime appears prepared to bear the cost of paralysing and probably dismantling the traditional uranium partnership with France – now its main international opponent.

Paul Melly is a consulting fellow with the Africa Programme at Chatham House in London.