Global Atomic renew its exploration licenses for uranium in Niger

Global Atomic renew its exploration licenses for uranium in Niger

Further foreign investment in Niger is expected to see uranium production grow significantly over the next few years.

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Further foreign investment in Niger is expected to see uranium production grow significantly over the next few years.

Niger is a landlocked developing country, with the Sahara Desert making up over 80% of its total land area. Niger was a French Colony from the 1890’s until 1960 when it was granted independence, it is the biggest country in West Africa.

A high grade uranium ore was first discovered in Niger in 1957, whilst the country was still under French rule, during explorations originally intended to discover copper.

Uranium mining

Niger is the 4th largest producer of uranium, behind Kazakhstan, Canada and Australia. It was first commercially mined in 1971 and is responsible for 7.6% of the world’s total production of uranium. The vast majority of uranium mined in Niger comes from two substantial mines; Somair and Cominak, both of which have been in operated for over 40 years by Areva, a French company.

It is believed that Niger has the largest deposits of uranium present anywhere in the world.

Whilst the price of uranium has been in steady decline since the early 1980’s, it still makes up over 72% of Niger total revenue from exports. The majority of the uranium mined is exported to France, in fact Nigerien uranium makes up 1/3 of all the uranium used in France to fulfil its domestic energy requirements.

Government negotiations

The Niger government is responsible for setting the “extraction price” of the uranium and whilst this is largely based on the applicable operational costs, it does tend to be slightly overinflated.

During renegotiations for a better deal, both Somair and Cominak closed at the end of 2013. Whilst both mines were forced back into operation by a government decree at the beginning of 2014, it wasn’t until May 2014 that a new contract was finally agreed upon. The new contract not only saw an increase in royalty taxes from 5.5% to 12%-15%, but also included an agreement that Areva would invest over $150m to develop the local infrastructure, including roads and other significant developments including new Headquarter buildings.

Global Atomic Fuels Corp

Global Atomic Fuels Corp in a Canadian company founded in 2005, it is one of Canada’s foremost uranium corporations.

The Republic of Niger has granted Global Atomic 6 permits to mine uranium across four different sites, the largest and highest grade deposit is the DASA deposit.

Global Atomic has already spend over $50m during their initial explorations in the area however thanks to other nearby mines, the infrastructure surrounding the DASA deposit is already very good, including a well-organized road network as well as water and power.

Whilst the freshly signed contract between the Nigerien government and Global Atomic is only for 3 years, the life scan of the DASA mine is expected to be at least 10 years with the potential to exceed 20 years if a lower grade product and an increase in price is accepted.

It has been forecast that by the end of 2018, the DASA deposit will be producing over 5 million pounds of uranium oxide per year.

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