Did France kick out China from Niger’s uranium and oil business?

The recent military takeover in the West African country of Niger has sparked discussion across the world. On July 26 2023, the commander of the Presidential Guard overthrew the democratically elected  President Mohamed Bazoum. Niger being a former colony of France means the uranium-rich country has developed close economic, political, and security ties with its former colonial power; just like several of Niger’s neighbours in West Africa. 

The political landscape of the nation has experienced notable transformations in recent years due to shifts in global relations and commercial interests in the abundant natural resources of oil and uranium. Despite being the Africa’s number one producer of uranium, Niger is one of the most poorest countries in the world.

France is the main importer of Niger’s uranium, and China on the other hand got interested. Nevertheless, there have been claims in recent years indicating that China has ceased its mining operations in Niger. This article seeks to explore the potential reasons for China abandoning its uranium interest in Niger.

Global Interest, Domestic Misery

Niger’s recent prominence in global geopolitics may be tied to its strategic role in the fight against Islamist insurgents in the Sahel region. But the open secret about its growing prominence and the shifting interest in Niger’s affairs are unarguably due to its abundant deposits of natural resources within the nation, particularly uranium and oil. Landlocked Niger ranks among the most impoverished countries globally and is placed third in the list of the top 10 countries with the lowest Human Development Index (HDI) of 0.400.

Aside from the low HDI, Niger has a persistently high birth rate with the latest figures from the World Population Review placing them first in the 2021 rankings of countries with the highest birth rate with an estimated birth rate of 47.28. Niger is recognized as one of the most economically disadvantaged nations globally.

As one of the members of the West African Franc Zone, Niger uses the CFA (Communauté Financière Africaine) currency printed for its all former colonies of France in West Africa.

Niger is currently grappling with substantial security challenges, which have been further exacerbated by Muammar Gaddafi of Libya in 2011. The emergence of Islamic extremists; namely Al Qaeda in the Islamic Maghreb (AQIM) in the northern region and Boko Haram in the southern vicinity, particularly near Lake Chad, has significantly worsened the security situation.

 Uranium Mines: French dominance and the Chinese interest

The mining of uranium by France in Niger has a historical background that can be traced back to the 1970s, characterised by a notable and esteemed trajectory. For a very long, Areva, a prominent French multinational nuclear energy firm presently referred to as Orano, has served as the principal operator of Niger’s two most significant uranium mines, namely Arlit and COMINAK (Compagnie Minière d’Akouta). Both of these mines are situated within the borders of the nation of Niger. It is not unexpected that France demonstrates interest in the uranium reserves situated in Niger, given that the country relies considerably on nuclear energy for electricity generation. It is said that one-third of France’s electricity is powered by uranium from Niger.

 Unlike France, China’s interest in Niger dates back to recent years, yet it has already had a considerable impact. This interest most likely began during the era of Zhu Xun, who was serving as minister of Geology and Mineral Resources when he travelled to Niger in 1990. But it wasn’t until 2007 that China was given the chance to enter a market that the government of Niger had only recently started to make accessible to businesses.

China National Nuclear Corporation (CNNC) was awarded one of the 150 contracts that were put up for bid and thus received access to a newly created mine in Azelik.  Societe des Mines d’Azelik SA (SOMINA), a joint venture was established in Azelik/Teguidda, 160km southwest of Arlit, in the Agadez region. It had 62% Chinese interest with 37.2% of that belonging to CNNC International. Niger’s government owned 33% while 5% was made of Korean interest. Azelik is positioned exactly halfway between Agadez, the major city in Niger’s northern region, and Arlik, where the primary Areva mine is situated.

The involvement of Beijing in the uranium industry was for a limited duration and did not yield significant financial gains. However, the investment made by China National Petroleum Corporation (CNPC) in the oil sector has been substantial and enduring, establishing it as a fundamental aspect of China’s presence in Niger. The year 2011 saw the beginning of oil extraction initiatives in Niger by CNPC.

 The claims in recent years indicating that China has ceased its mining operations in Niger have generated speculation and discourse about the factors driving this transition, and the veracity of these speculations remains uncertain. Despite the absence of official confirmation regarding the cessation from the Chinese government or any affiliated entities, several conceivable factors may account for this occurrence.

 Why China is not involved in Niger’s uranium industry?

To begin with, it is plausible that the prevailing market conditions may have played a role in influencing the outcome. The potential decrease in profitability of China’s operations in Niger may be attributed to the reduction in commodity prices, particularly oil and uranium, which has been influenced by the global economic downturn. The price of Uranium was trading low, around $20 on the world market in 2015 and later went down below $10 per pound in 2017. The decrease in the price of uranium, along with the slowdown of China’s economic growth during that period resulted in a postponement of an investment by CNNC that ultimately did not come to fruition in its entirety.

 The second possibility is that political factors are at play here. Niger, like many other African states, has been struggling with security issues, political instability, and uncertainty on regulatory matters. It’s possible that these problems, along with the pressure and scrutiny from the international community, dissuaded China from continuing its involvement. In the year 2007, an employee of China Nuclear Engineering and Construction Corporation (CNEC) was abducted in the western part of Niger, near the country’s borders with Mali and Burkina Faso by a Tuareg rebel faction called Mouvement Nigerien pour La Justice (Niger Movement for Justice).

The group advocated for an enhanced level of self-governance in Northern Niger, along with a heightened distribution of financial resources to benefit the local population. The campaign expressed discontent with the Chinese company’s disregard for environmental concerns, as well as its support for the Nigerien regime. Notwithstanding the eventual release of the executive unharmed, the persistent presence of peril resulted in the postponement of production until 2012.

 Last but not least, the role of France is one that just cannot be disregarded. Because of the length and depth of its relationship with Niger, France exerts a considerable amount of influence over the political and economic processes that take place in the country. Even if there is no concrete proof to support this claim, it is a possibility that France made use of its influence to restrict China’s involvement in the resource-based industries of Niger.

According to the World Nuclear Association (WNA), Niger, which contains Africa’s highest-grade uranium ores, produced 2,020 metric tons of uranium in 2022, or roughly 5% of global mining output. Niger has relied heavily on Areva (now known as Orano since January 2018), a French state-owned company. Areva has been criticized for its lack of transparency and its close ties to the Niger’s government since the 1970s.

Similarly, President Mamadou Tandja opted to engage China National Petroleum Company (CNPC) to explore oil reserves in eastern Niger; ditching Western corporations. The agreement was criticized for a lack of transparency. President Tandja also appointed his son as Commercial Attaché at the Chinese Embassy in Niamey, a decision that raised suspicions of corruption. These suspicions were said to have played a role in Tandja’s downfall in 2010.

 Statistics show that China began uranium imports from Niger in 2010, purchasing 14% of the country’s uranium exports at the time. In 2012, its market share was 17%, while in 2014, it was 37%. China, however, stopped purchasing uranium from Niger after that and instead chose to turn to other suppliers, such as Namibia, where another Chinese state-owned business, China General Nuclear Power Group, purchased a mine; or closer to home, such as Kazakhstan, and also falling back on its uranium reserves.

Although it may appear that France has triumphed as a result of China’s reduced involvement in the uranium and oil sectors in Niger, this does not necessarily mean that competition has come to an end. Russia, which is currently getting attention from the current coup leaders and supporters is also being invited into the picture as anti-Western sentiments sweep through the nation.

In conclusion, the mining operations in Niger represent a complex interaction of global forces, market dynamics, and national interests. Political instability, growing security in the Sahel region, fluctuating uranium and oil prices, and lastly France’s great influence in both the economic and political matters of Niger may not fully explain the WHY, yet the aforementioned provide insight into the difficulties and constraints that might have contributed to China’s halted and reduced involvement in Niger’s uranium and oil industries respectively.

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