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Arlit is a dusty and neglected place, scoured by desert sandstorms and barely touched by the mineral wealth it ships off to Europe each year. “There are neighborhoods which go without water for three weeks at a time,” said Deputy Mayor Hassan Hamani. “There are schools where the pupils have to sit on the floor or study in straw huts.”

Now Niger’s government is demanding a better deal from Paris, and specifically from state-owned nuclear company Areva. The two sides began talking more than a year ago but failed to clinch an agreement before Areva’s 10-year mining contracts expired on December 31.

Areva suspended production at its two sites in Niger in mid-December: the open-cut Somair mine at Arlit and giant underground Cominak pit nearby. The company says the closure was for maintenance but Synamin, a union that represents mining workers, called it a negotiating tactic. Production resumed at the start of February.

Areva and Niger’s just-expired agreements have never been made public. But Reuters has reviewed documents which reveal that Areva’s mines pay no export duties on uranium, no taxes on materials and equipment used in mining operations, and a royalty of just 5.5 per cent on the uranium they produce. A spokesperson for Areva declined to confirm the authenticity of the documents and did not comment on their contents.

Niger’s President Mahamadou Issoufou says the deals are a throwback to the post-colonial era, when France played a dominant role in the economies of its former African territories. His government wants to cut the tax breaks and raise the royalty rate – its largest source of income from the mines – to as much as 12 per cent.

That would be more than the five per cent charged by most Australian states, but bring Niger into line with the 13 per cent charged by Canada’s uranium-producing province of Saskatchewan over the past decade. In Kazakhstan, the official rate is 18.5 percent. Areva produces uranium in both Canada and Kazakhstan but would not detail the royalties it pays in those countries. (It explores for uranium in Australia but does not mine it there).

Mining Minister Omar Hamidou Tchiana, leading the negotiations for Niger, told Reuters the government wants to increase uranium revenues to at least 20 percent of the budget, from just 5 percent at present.

“For 40 years, Niger has been one of the world’s largest uranium producers, but it’s still one of the poorest countries on the planet,” he said. “At the same time, Areva has grown to be one of the world’s largest companies. You see the contrast?”

Areva, which produced nearly one fifth of the world’s uranium in 2012, says a higher royalty rate would make its business in Niger unprofitable.

With uranium prices down about 70 percent from their peak in Niger needs to take into account that Areva is not in great financial health and that the uranium price is low and not about to increase anytime soon,” said the source.

Tax breaks

A new deal is important for Areva, but vital for Niger., a diplomatic source in Paris said Areva would not agree to a big increase in what it pays Niger. With global revenues of 9.3 billion euros ($12.56 billion)in 2013, the French firm is almost twice as big as Niger’s entire economy according to the IMF. Loss-making and with net debts of nearly 4 billion euros, it is still Niger’s biggest private employer and its largest exporter……. http://tribune.com.pk/story/667988/a-nuclear-story-areva-and-nigers-uranium-fight/