The coup in Niger, an African nation rich in uranium resources, has now been ongoing for a week, with no sign of the situation improving. European countries have already begun evacuating their citizens. On August 2, France and Italy began airlifting citizens from their countries and other European nations. Germany has also advised its citizens to leave the country.
On July 26, soldiers from Niger's presidential guard detained President Bazoum and several high-ranking officials, including the Minister of Mining. The crisis has brought uncertainty to the global uranium supply. Uranium, the heaviest element found in nature, is used in various sectors such as nuclear power, medical applications, and the military.
Niger has a total uranium reserve of more than 310,000 tons, boasting two major uranium mines. One of these, the yet-to-be-operational Imouraren mine, is one of the largest uranium deposits in the world. However, due to low international uranium prices, regional instability, and competition from Central Asian countries, Niger's production has declined, and it is now the seventh largest producer worldwide, accounting for about 5% of global output.
Since the coup, the international price of uranium has not risen significantly, primarily because mining operations in the country have not been halted. However, analysts warn that the price may increase more substantially in the coming weeks.
According to analysis by UxC, a nuclear industry market research firm, the spot price of uranium increased from $56.15 per pound a week before July 31 to $56.25 per pound. In recent years, the international price has been low, but it has doubled in the past three years, still far below the 2007 peak of $140 per pound.
Europe at Highest Risk
The uncertainties in Niger's uranium mining mainly affect the European Union (EU), especially France, a major nuclear power.
As per data from the European Atomic Energy Community (Euratom), last year Niger was the second-largest supplier of uranium to the EU, accounting for 25.38% of its total imports. This uranium primarily fuels 103 nuclear reactors in 13 EU member states, half of which are located in France.
France relies heavily on nuclear energy, with nearly 70% of its energy structure being derived from it. The country does not produce uranium, so the swift and convenient acquisition of it is crucial to France. Between 2005 and 2020, Niger was France's third-largest supplier of uranium, providing 19% of its supply.
Following the coup, the authorities in Niger threatened to freeze uranium exports to France, stirring up concerns. However, the Europeans collectively denied facing a supply risk.
EU Commission spokesperson, Adalbert Jahn, asserted that the coup does not pose a supply risk to the EU. He pointed out that the EU has ample uranium reserves to mitigate any short-term supply risks, and the global market also has sufficient stocks in the medium to long term. Euratom also stated that European nuclear power production would not be at immediate risk if Niger reduces uranium supply, as the consortium's stock can last for three years.
On July 31, the French Ministry of Foreign Affairs stated that the country's uranium imports are highly diversified, with recent imports mainly from Uzbekistan, Kazakhstan, and Australia. The French Ministry of Energy Transition also stated that there is "no" supply risk.
On August 1, a spokesperson for Orano, the French state-owned company monopolizing the mining of Niger's uranium, told Agence France-Presse that the current crisis would not pose a short-term risk to the company's supply capacity in France and internationally due to diversified supplies and mines spread across four continents. The company also stated that its operations in Niger have not been interrupted, and most of its employees are locals.
However, some analysts pointed out that in the long run, the coup in Niger might pose a challenge to Europe's uranium demand. Europe is currently trying to reduce its dependency on Russian natural gas and uranium. Uranium from Russia is not yet on the EU's sanctions list. Phuc-Vinh Nguyen, an energy expert from the Jacques Delors Institute in Paris, suggested that the tense situation in Niger might further hinder the EU's implementation of sanctions in the nuclear field against Russia, complicating the sanction process.
Other Countries Also Have Plans
Due to former colonial ties and massive demand, France has been deeply involved in Niger's uranium mining since half a century ago, and it still monopolizes Niger's uranium mining. However, relations between the two countries have been tense in recent years, with repeated disputes over uranium pricing.
Niger is opening its doors to other countries. Last year, President Bazoum of Niger stated that cooperation with France is not mandatory, and Niger's uranium mines are open to all miners with the necessary technology. In November of last year, the country's Minister of Mining revealed that Niger had issued 31 uranium exploration permits and 11 uranium mining permits.
The United Kingdom, Canada, China, India, Italy, Russia, and the United States are all seeking to tap into Niger's uranium mines.
At the end of June this year, the China National Nuclear Corporation signed an agreement with the Niger government to resume uranium exploration and mining activities in the northern region of the country. The project was abandoned nine years ago due to poor uranium sales on the international market. In November last year, the Canadian company Global Atomic Corporation began mining uranium about 100 kilometers south of Arlit in Niger. The United States has also made substantial investments in Niger in recent years.
In the past decade, the global supply of uranium has been in surplus and prices have been consistently low, leading producers to lose interest in expanding investments. However, analysts point out that the ongoing expansion of nuclear power, especially in China, is pushing up global demand, which will lead to a rise in uranium prices.
A uranium mining expert in the country told Agence France-Presse that uranium prices are slowly rising. In the long run, the market will have a large demand, especially considering Russian or Chinese nuclear power stations.
Ben Godwin, head of analysis at Prism Political Risk Management in London, also stated that global uranium demand has been rising over the past few years. Since the beginning of this year, the spot price of uranium has risen nearly 40%.
Jonathan Hinze, president of the nuclear industry market research firm UxC, stated that it will take more time for the impact of the coup in Niger on the market to become evident. He told Reuters that all signs indicate that the current overall supply and demand relationship for uranium is in a "tight balance" state, which will be a catalyst for an increase in uranium prices. The market is "likely to see a greater impact from the event in the coming days and weeks," he added.
