Nuclear giant Urano loses control of uranium operations to the junta

In the latest sign of a significant deterioration in relations, Niger's military rulers appear increasingly intent on pushing France out of any important sector of their economy – especially uranium mining.

French state nuclear company Orano announced this week that the military junta — which ousted France's ally, President Mohamed Bazoum, in a coup in July 2023 — had taken control of its local mining company, Sumer.

The company's efforts to resume exports were blocked for months by the regime, pushing it into a financial crisis.

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

So the timing could not be more difficult, as Western countries struggle to confront the challenge of climate change and reduce their carbon emissions from electricity generation.

For French President Emmanuel Macron, who is already suffering from a political crisis at home, Orano's potential departure from Niger is certainly embarrassing in terms of image.

Because it coincides with painful news from other long-time African partners – Chad suddenly announced the end of a defense agreement with Paris, while Senegal reiterated 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 major practical challenge to French energy supplies.

With 18 nuclear plants, and 56 reactors in total, generating nearly 65% ​​of its electricity needs, France has been ahead of the game in containing carbon emissions from the energy sector.

But the country's limited uranium production ended more than 20 years ago.

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

Continued paralysis, or eventual closure, of Orano's operations in Niger would certainly force France to look elsewhere.

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

Last year, when neighboring countries in West Africa responded to the coup in Niger with a trade blockade that crippled uranium exports, other suppliers were quick to weigh in.

EU imports of the metal from the country fell by a third, but were largely replaced by Canada.

But there was also a politically awkward price to pay. European Union imports of uranium from Russia rose by more than 70%, despite severe sanctions imposed on Moscow over its invasion of Ukraine.

Naturally, Russia has become the new best friend of the military leaders who have seized power in Niger and its allied neighbors, Burkina Faso and Mali, since 2020.

Russian military contractors are fighting alongside the Malian army in its campaign against jihadists and Tuareg separatists, while also helping to protect the top leadership of the junta in Niger and Burkina Faso.

Although France, and Europe in general, will be able to find ways to deal with the eventual loss of uranium supplies in Niger, this transition will not be entirely comfortable.

At least in the short term, EU countries may become more dependent on Russia and its Central Asian neighbors, thus undermining their efforts to maintain economic pressure on President Vladimir Putin during what could be a crucial period in the Ukrainian crisis.

Moreover, the regime in Niger, whose position in dealing with the European Union as a whole has become as lacking in confidence as its torn relationship with France, continues to search for alternatives to its old Western partnerships.

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

Contacts between the two governments deepened, with Nigerien Prime Minister Ali Mahamane Lamin Zein visiting Tehran in January. Rumors of a possible deal to supply “yellowcake” uranium (concentrate) circulated briefly a few months ago.

On the other hand, Orano's prospects for restoring normal uranium operations and exports from Niger appear bleak, given the hostile stance adopted by the military regime in Niamey.

This antipathy can be partly explained by Macron's vocal condemnation of the July 2023 ouster of Bazoum, who was one of his closest African political and security partners.

Paris has strongly backed the hardline stance of the West African regional group ECOWAS, and there were even rumors that it may have been willing to provide tacit support if the bloc went ahead with its short-lived threat to intervene militarily in Niger to reinstate Bazoum.

In this toxic atmosphere of hostility and mistrust, Urano was an obvious and convenient target for the junta's retaliation.

The French company's dominant role in the uranium sector has for years sparked resentment among many Nigerians, amid allegations that the French company was buying uranium at a cheap price, despite periodic renegotiations of the export deal. Although mining operations did not begin until years after independence, it was seen as a symbol of continuing post-colonial French influence.

After last year's coup, Urano herself tried to stay away from the diplomatic row, keep a low profile and continue working normally.

But the trade blockade imposed by ECOWAS prevented it from exporting the production of the Sumer mine near Arlit in the Sahara.

Even after sanctions were lifted in late February, the usual route for uranium exports, through the port of Cotonou in Benin, remained closed, because the junta kept the border closed amid the ongoing political dispute with Benin.

Urano offered to fly the uranium abroad, but the regime rejected this proposal.

In June, the junta revoked the French company's rights to develop a new mine at the large Imorarin mine, which was seen as the uranium sector's main new hope for future growth.

Meanwhile, the export blockade was pushing Sumire, which by November was sitting on 1,150 tonnes of banned stock of uranium concentrate worth $210m (£165m), into a financial crisis.

When Orano decided to halt further production and prioritize paying workforce salaries, relations with the government deteriorated further to almost complete collapse this week.

Of course, it is not only the company, but also Niger's economy that is paying the price for this situation, in losing export revenues and risking hundreds of jobs.

For Arlit and other communities in the northern desert, this would be a devastating blow, despite talk of a revival of activity in 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 supported by a sharp rise in oil exports, thanks to a new pipeline built by China.

Thanks to this financial cushion, the regime appears prepared to bear the costs of crippling, and perhaps dismantling, its traditional uranium partnership with France – its main international adversary now.

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