Somair’s Open pit Uranium mine in Niger. Photo: Areva

Situated in West Africa, bordered by Nigeria, Chad, Burkina Faso, Libya, Mali and Algeria, the Republic of Niger is a landlocked country. Niger gained freedom from the French in 1960, was under military rule for the most part of its recent history and has been prone to frequent terror attacks, droughts and floods. Compared to its more affluent neighbour–Nigeria, Niger has a smaller economy, with its 2019 GDP being calculated at USD 12.928 billion.¹

However, what’s interesting is that Niger is the fourth largest producer of Uranium² and its mines provide roughly 5% of the world’s Uranium mining output.³

Niger also enjoys good relations with many nations in the east as well as the west. It’s a member of the United Nations, African Union and the Organisation of Islamic Cooperation. Niger has good ties with France and China as well, with both the countries having stakes in Niger’s Uranium mining companies.

Current Mining Companies Operating in Niger

At present, Uranium is mined in two towns in Niger– Arlit and Akokan. Mining is carried out by four companies. “Production is first sold to the partners in proportion to their equity at an ‘extraction price’ determined by the government.”⁴ All these mines are joint ventures, co-owned by the Niger government and by private companies.

a) SOMAIR

SOMAIR (Société des Mines de l’Aïr) is owned by the French mining company Orano (63.4%) and by the Niger government–Sopamin (Société du Patrimoine des Mines du Niger) which owns 36.66% of the stakes. According to Orano,⁵ SOMAIR conducts mining operations at multiple fields in Arlit with the venture having extracted nearly 68,000 tons of Uranium so far.

b) COMINAK

COMINAK (Compagnie Minière d’Akouta) is run by Orano, Niger, Canadian and Spanish government ventures. Orano 34% stakes, Niger owns 31%, Orud owns 25% and 10% of stakes is owned by Enusa Industrias Avanzadas SA (Spain). According to Urano,⁶ more than 70,000 tons of Uranium has been mined by COMINAK, with an average of 8 pounds of uranium being mined per ton of ore in 2016.

c) Imaouraren Inc

The company mines at a location of 50 miles south of Arlit. It is owned by Orano (66.65%) and the Niger government (33.35%).

d) SOMINA

SOMINA (The Societe des Mines d’Azelik SA) is a joint venture run by China’s CNNC International (37.2%), the Niger government (33%), another Chinese company– ZXJOY Invest (24.8%) and Korea Resources Corp (5%). The company extracts Uranium in Azelik 160 kms southwest of Arlit.

Niger’s Current Needs

Even though the country is rich in Uranium, it is still plagued by poverty and currently ranks 189th in the Human Development Index.⁷

According to World Bank data, as of 2018, only 17.6% of Niger’s population has had access to electricity.⁸

Also, many claim that Niger has consistently received the raw end of the deal from Orano, because even though Uranium accounts for around 70 percent of the country’s exports, it contributes only 5 percent to the national GDP.⁹

However, the government has signed contracts with multiple MNCs to boost trade in other sectors. For instance in October 2020, Sterling and Wilson Pvt Ltd (SWPL), one of India’s leading engineering, procurement and construction (EPC) companies announced that it has signed a contract to construct a solar PV battery storage and diesel genset based hybrid power plant in Niger’s Agadez region. According to reports,¹⁰ the project also includes the rehabilitation of the electrical network of the city of Agadez, and the electrification of the neighbouring hamlet of Tibinitene.

The Niger government is actively looking to attract investments not just in the mining sector but also in the hydrocarbon and oil sectors. Niger is currently building two pipeline projects to export petroleum.¹¹

Need For Sustainable Mining

The Niger government is trying to make the most of its Uranium reserves and one such attempt was in 2013, when the government awarded 38 new mining licences.

However, many believe that Niger is afflicted by what’s commonly known as the “resource curse”. A term first coined by Richard Auty in 1993, it claims that resource-rich countries suffer from inferior GDP growth due to extracting activities, resulting in the poor becoming poorer.

However, many researchers argue that extracting activities do not solely influence human development in an area. “The poor in many extractive economies are as likely or more likely to benefit (from growth spells) than are the poor in non-growing extractive economies…and resource extraction is bad for the poor only if it increases the frequency of negative growth in an economy.” ¹²

Philip Crowson is of the same opinion as he argues, that “there is no inverse corelation between the share of mineral exports in GDP and the annual average rates of growth of GDP.”¹³

Success Stories

Here’s a look at a few examples that prove the abovementioned point–

a) Gold mining in Australia during the 19th century

While initially, the local community seemed to suffer from extracting activities, Crowson argues that the immediate adverse impacts were soon countered by tremendous economic benefits, with the gold fields becoming the driving force of the Australian mineral economy. Crowson also claims that one of the key reasons, for gold mining in Australia being a success was reinvestment of mining profits into the local community.

“Much of the profit of gold mining was ploughed back into commercial enterprises and services in local towns…The demands of the miners for food, clothing, housing and equipment directly stimulated agricultural and industrial development, with large multiplier effects creating added indirect impacts.”¹⁴

The multiplier effect of reinvesting mining profits in the local community coupled with immigration and promotion of agricultural activities is what developed the region of Victoria and what is today known as the city of Melbourne.

b) Positive growth spells in Indonesia

Government policies and strong institutional presence are key to turning extracting activities into positive activities that will usher in development for the local community and result in profit.

“Indonesia enjoyed its first growth spell (1970s) on the back of a mild minerals and energy boom. Indonesia’s other three spells (1980s-1999) saw mineral and energy exports decline and economic growth slow, yet in each spell economic growth was positive and either anti-poverty or pro-poor,” claims Graham A Davis.¹⁵

Davis further states that “Increasing per capita resource extraction increases the chances of positive growth, and because positive growth is good for the poor, pro-growth policy in extractive economies should not only be directed at rectifying political and institutional shortcomings, but also directed at enabling a sustained extraction profile.”¹⁶

c) The Landau Colliery South Africa and community development

Anthony Dane claims that mining in the Landau Colliery did not just create an environment for reinvestment, but it also developed secondary and tertiary sectors and contributed to diversifying the national economy. Dane claims that strong policy regulations helped the local community make the most of mining activities in the region. According to Dane, 23% of the local workforce at the Landau Colliery is employed in the mining industry.

“A poverty study analysing household consumption welfare indicators (Aldermanet al. 2000) estimated that the Magisterial District of Witbank (presently the Emalahleni Local Municipality) had an imputed mean monthly expenditure of R3,525 per household (at 1996 prices), and fell into the category “Least poor” where less than 20% of households were below the poverty line of R800 or less per month. This value is well above the national average of R2,789 per month (Aldermanet al. 2000).”¹⁷

Means To Make Mining Sustainable

In conclusion, as Davis claims, “if natural resource development is the only means a country has to create growth, then it is better doing that than not doing it.”¹⁸ However, there are one too many examples of mining destroying not just the environment but also the other resources of a local area where extracting activities were conducted. Therefore, it is crucial that mining is sustainable. One way to ensure this is through strong and meaningful tax policies.

Experts believe there are two ways of attaining sustainability through employing good tax measures.

“Revenues can be used to support current consumption; that is, the expenditures do not generate another form of capital, but may help to off set any negative environmental, health, or other socio-economic impacts. Or revenues can be invested, with the interest used to fund beneficial programmes rather than spending the principal. The latter type of investment strategy ideally converts non-renewable natural resources into a perpetual benefit stream.”¹⁹

Conclusion

Like every extraction cycle, Niger’s Uranium extraction is expected to go through a boom-bust cycle. Strong government policies, tax measures and reinvestment into the local community can ensure that when the country does experience its Uranium boom phase, it not only results in MNCs gaining huge profits but also results in the development of the local community.