French government backs Niger in its battle with French uranium miner

Areva extracts 40% of its uranium for Niger. France is highly dependent on this uranium.

France’s Areva isn’t getting much sympathy from its home government over its troubles with the Niger government.

French development minister, Pascal Canfin, has declared that the Niger government’s decision to end the company’s tax exemptions is “legitimate,” France’s Le Monde reported (in French).

Over the past two years Areva and the Niger government have been negotiating uranium extraction contracts for the next 10 years.

Areva’s mines have been closed since mid-December and although the company says its due to routine maintenance, some see the closures as “hardball tactics” by the miner, the Guardian reported last month.

Speaking before the National Assembly, Canfin said that the agreement between Areva and Niger – expected by the end of February – will allow the African nation to impose higher taxes, and that this move is considered legitimate by the French government.

Areva extracts 40% of its uranium from this former colony and France is highly dependent on these resources: The country relies on nuclear energy for 75% of its electricity generation. Meanwhile, Niger is expected to become the world’s second largest uranium producer within a few years.

Humanitarian group Oxfram has been lobbying the French government – a majority shareholder of the nuclear company – to not put any pressure on Niger to exempt Areva from taxes.

The taxes in question stem from a 2006 mining law from which Areva believes it should be exempt. According to the Guardian, the African country wants to increase the company’s royalty payments from 5.5% of revenues to 12%.

Areva says these royalties would render its business unprofitable.

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