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France's Orano claims its Niger uranium mining is on the verge of bankruptcy

The French uranium mining company Orano announced on Wednesday that its joint venture with Niger SOMAIR is nearing bankruptcy due to export restrictions imposed on it by the military government of Niger.

Orano had to stop production at SOMAIR when authorities stopped exports in the past year. The Niger government took over the operation in December, and announced plans to take it back last month. It is part of a trend of West African countries seeking more control of their natural resources.

Niger is also the seventh largest uranium exporter in the world. When Orano's local unit was operating at full capacity, the country supplied about 15% of Orano’s uranium.

Orano responded to emailed questions by saying that they had flagged SOMAIR's worsening finances since October, as their year-long dispute escalated with the West African country.

Orano stated that "the Nigerien authorities insistence to continue production costs at all costs has led to the present situation where SOMAIR is on the brink of bankruptcy."

The Niger's Ministry of Mines didn't immediately respond to an inquiry for comment about Orano’s assessment of Orano’s unit’s financial situation.

The junta that seized power in 2030 said Orano was extracting 86.3% since 1971, despite owning 63% of the mine.

Orano, according to the main union of mineworkers in the country, has committed acts of sabotage. They also claim that Niger's uranium mining has not been fair. Orano denies these accusations.

Orano claimed that SOPAMIN, the Niger state-owned company, had engaged in opportunistic behaviour by refusing its share of production when uranium prices were low to avoid losses.

Orano said that the State of Niger had not always exercised its rights to offtake uranium, particularly during low-price cycles. This forced Orano's to buy additional uranium to maintain the mine's financial viability.

Orano stated that it wanted to use the remaining financial resources of the venture to pay employee salaries and maintain industrial facilities.

The spot price of uranium is up 7% this year. It reached a seven-month record high last week at $79 per pound.

The company did not provide any further details on its plans as Niger continues to implement nationalization plans.

Burkina Faso, Guinea and Mali have also taken over Barrick's Loulo-Gounkoto Gold Complex. They are now focusing on Russian interests while pushing for greater mining shares. Maxwell Akalaare Adombila (reporting; additional reporting by Boureima Balima in Niamey, Polina Devitt in London and Veronica Brown in London)

(source: Reuters)