Areva in Niger: who is benefiting from the uranium?

Niger, one of the poorest countries in the world, and Areva, a world leader in nuclear energy spearheading France's economic diplomacy, have for the past several months been renegotiating the for Nigerien uranium mining contract, which will runs until December 31, 2013.

In a briefing note on mining agreements between AREVA and Niger [1], Oxfam and ROTAB, both members of the "Publish What You Pay" coalition, denounced the secrecy and pressure surrounding the negotiations.

The organizations also denounced a tax regime that is more accommodative for the multinational which has been mining Nigerien uranium for 50 years, accounting for nearly 40% of its global supply.

Tax advantages and exemptions

AREVA's two subsidiaries in Niger, Somaïr and Cominak, benefit from a number of tax advantages: exemptions from duties, VAT and even fuel taxes, which they use in massive amounts. A "provision for the reconstruction of mines" also lets them set aside 20% of their profits which are therefore excluded from corporate taxes.

In 2010, the two subsidiaries extracted a total of 114,346 metric tonnes of uranium in Niger, representing an export value of 2.3 trillion CFA francs (over 3.5 million euros). From that sum, Niger was only paid 300 billion CFA francs (approximately 459 million euros), or 13% of the exported value [2].

One of the poorest countries on the planet

"It is incomprehensible that Niger, the world's fourth-largest uranium producer and a strategic supplier for Areva and France, is not taking advantage of the revenue from this extraction and remains one of the poorest countries on the planet. Current negotiations represent a historic opportunity for Niger to obtain better conditions for extracting theses resources, including greater financial benefits", underscored Anne-Sophie Simpere of Oxfam France, who prepared this research.

"In France, one out of every three light bulbs is lit thanks to Nigerien uranium. In Niger, nearly 90% of the population has no access to electricity. This situation cannot continue. France must prove that the time for secret agreements, closed negotiations and pressures is over. African countries should be able to count on fair revenues from French companies extracting their resources", said Ali Idrissa, national coordinator for ROTAB – Publish What You Pay Niger.

Free access to health care is under threat

Niger needs additional revenues to address recurring food crises, to ensure the survival of a system of free access to health care that is under threat, to invest in education, agriculture, and to address the deteriorated security system. The next agreement between AREVA and Niger should allow for raising tax revenues for this country that is highly dependent on public aid for development, which can account for up to 40% of its budget.

"Unfortunately, so far Areva has not replied to our many requests for meetings. It is extremely difficult to access figures on uranium mining in Niger and on taxation of local Areva activities Areva claims that 70% of the uranium's value goes to the Nigerien government. But the Nigerien government and Nigerien civil society consider the partnership to be unbalanced: uranium represented 70.8% for the country's exports in 2010, and only 5.8% of GDP", added Anne-Sophie Simpere.

Transparency and equity

However, pressure to increase revenues and transparency for extraction industries is now worldwide and France asserts that it is a leader in the area.

The government supported the new country-by-country reporting requirement for mining companies in the European Directives passed last June following the Dodd-Frank Act that established this principle in the US. France also contributed up to 10 million dollars to the new World Bank trust fund aimed at helping African countries negotiate deals in extractive industries.

Minister of Development Pascal Canfin affirmed in September that France should lead by example in the negotiation of new AREVA contracts [4}. However, all indications point to the AREVA contract being renegotiated in complete secrecy. No information is available. Even the conclusions of an external audit of Somaïr and Cominak completed in October, which should be the basis of the renegotiation, have not been released.

"France, which hold over 80% if the AREVA shares, has a key role to play in this regard: it must guarantee transparency and equity in these negotiations. The clock is ticking", added Anne-Sophie Simpere.