The metal products were stored at the Ukrainian customs warehouses before the large-scale invasion. The customer was a Ukrainian enterprise.
Metal was produced by a company of the sanctioned Russian billionaire Andrey Komarov. He was sanctioned by the National Security and Defense Council of Ukraine.
In May, Ukrainian entrepreneurs using various shell companies tried to clear Russian metal to no avail, thanks to the reaction of the law enforcers.
The companies said the European Union’s current plans and funds were not enough for the necessary investments in the bloc’s battery industry for electric vehicles and renewable power storage – a pillar of the shift to green technologies.
“Today China controls not only large shares of cleantech manufacturing but also 50-90% of the critical minerals processing capacity needed for those, as well as many global resources,” said the letter to Commission President Ursula von der Leyen, signed by 16 companies and organisations.
They included miner Rio Tinto, chemicals group Solvay and battery materials makers Umicore and Northvolt.
“The U.S. is fast catching up with its mammoth investment package under the Inflation Reduction Act, while Europe’s investment climate has been further worsened from the ongoing Ukraine conflict,” the letter added.
The companies called for a European Critical Minerals Fund, which would operate on an EU level and which could directly finance companies.
They also urged the commission to expand its innovation fund with targeted support for the critical minerals sector.
Existing EU funding streams are “a patchwork of insufficient, uncoordinated and complex schemes” which focus mostly on research and development, they said.
On March 16, the European Commission published a proposal for a new Law on Critical Raw Materials. EU wants to compete with China and the USA in the production of green technologies, as well as to reduce the emission of harmful gases by 2050. Critical raw materials are primarily rare metals necessary for modern green technologies, and lithium is among them. EU members are obliged to carry out geological research and mapping of new deposits in order to reduce import dependence on China through the exploitation of critical raw materials. It is also planned to form a Committee for Critical Raw Materials, which will have the right to declare certain exploitation projects as strategic and reduce the maximum period for issuing permits for the operation of such mines to 24 months. Serbia is not mentioned in the new law, but cooperation with exporters such as Namibia, Chile and Canada is announced. As Serbia is home to one of the largest lithium deposits in Europe, it is not excluded that the Jadar project will also have a geopolitical dimension. Especially since Serbia opened negotiation chapter 15 on energy on December 14, 2021, in the midst of protests against amendments to the Law on Referendum and the Law on Expropriation, which, it was believed, served to speed up the implementation of the Jadar project. Meanwhile, BIRN obtained a report from the meeting between the representatives of the Rio Tinto company and the head of the EU Delegation in Serbia, Emanuel Gioffre, held on March 25, 2022, two months after the end of the project was allegedly put on hold. The company’s representatives then said that they support the local one, but that they are afraid of the results of the national referendum.
A fairy tale of accelerated growth
With its GDP per capita of 7,803 euros, Serbia is 2.6 times behind a medium-developed country such as Slovakia, and even 4.7 times behind the EU average. In other words, the GDP per inhabitant of Serbia would have to grow by 10 percent per year on average over the entire decade just for Serbia to reach today’s Slovakia. Or 13 percent per year to be similar to what it was then (or only slightly less if we take into account the Balasa-Samuelson effect that would act on the appreciation of the dinar and which would eventually help to equalize the GDP per capita faster), assuming that Slovakia in that period grows a modest 2.5 percent. It is immediately clear that this kind of growth is simply not possible – neither without the Jadar project, nor with ten such projects in the next ten years. The President of Serbia has repeatedly said that the exploitation of lithium would contribute to GDP growth of 3.5 to 4 percent. “We would have 3.5-4 percent higher growth on an annual basis,” he literally said. Growth higher by 3.5-4 percentage points per year means that, say in 2022, growth would be around 6.05 percent (actual growth of 2.3 percent plus 3.75 percentage points), and growth higher by 3.5-4 percent would mean that it would be 2.39 percent (2.3 percent times 1.0375). I reasonably assume that the president meant percentage points, not percentages, as he said, for two reasons. First, the difference in economic growth between 2.3 and 2.39 percent, although welcome and many times closer to the real effects, is far from the economic miracle needed for Serbia to catch up with the middle developed European countries. Second, politicians – even when they know the difference between a percentage and a percentage point – almost always use a percentage in both cases to be more “understandable”. And now let’s demystify the claim that the opening of one company, no matter how big it is, could accelerate economic growth by 3.5-4 percentage points and thus enable Serbia to catch up with the mentioned countries. Admittedly, not to catch up with them, because Serbia needs growth of 10 or more percent for 10 years in a row. And Serbia has never achieved such a growth rate. Not during one year, let alone continuously. In fact, such rates can only be achieved by extremely underdeveloped countries with a growing and young population, such as China (two decades ago) or African countries. In addition, history is dominated by examples that show that through the direct exploitation of mineral raw materials, few countries, and even fewer populations, developed (became happy), and that instead of economy, corruption mostly develops. This is also shown by the countries of South America, which are incomparably richer in ores.
Having shown that even an increase in growth by 3.5-4 percentage points alone is insufficient to fulfill the fairy tale, we will now show to what extent it is impossible and improbable to achieve it through the Jadar project. First, the information that this project would increase growth by so much is not even in the study on economic effects, prepared by Rio Tinto. The study evaluates the economic effects significantly more modestly – the project would increase the GDP by 2.8 percent in the phase of full realization – that is how much it would participate in the formation of the GDP. Therefore, if the Jadar project were to be realized, and everything else in Serbia remained unchanged, the GDP per inhabitant would increase from 7,800 to 8,029 euros. The opening of the mine would help, therefore, to cross only one-eightieth of the way to the “then Slovakia”! At the same time, all these assumptions in the Rio Tinto study refer not only to direct, but also to indirect (development of domestic suppliers and subcontractors) and induced effects of the project (generation of GDP through spending of income generated in the company). Assumed indirect effects (not directly dependent on the project) actually make up most of the assumed effects – out of 5,120 new jobs, only 1,170 are predicted to be created in the mine, and the remaining almost 4,000 are related to indirect and induced effects. This is not necessarily too optimistic, but, nevertheless, a project of this size must require serious planning – which new investments would it attract, which domestic suppliers could it hire, do they need support to increase capacity, acquire new equipment, and the like – otherwise these effects would be completely absent.
Let’s take a step back, to the claim that the opening of one company can make up for Serbia’s 30-year lag by accelerating growth. The statement that the opening of one company could accelerate growth by 3.5-4 percentage points indicates economic illiteracy or deception. Because it would have to be a company with the economic strength and size of EPS, three Ziđina or six Michelin factories. And every year for the next ten years. At the same time, the business assets of EPS, together with Kolubar, are 4.5 times larger than the planned investments in the Jadar project, while the number of employees in EPS is 30 times larger! Considering the similarity of the industry, a convenient comparison with the Jadar project is China’s Zijin, as it had comparable investments and has six times more direct employees. At the macro level, Ziđin generates about one percent of Serbia’s GDP, and in the past, a record year for them, it participated in exports with 4.5 percent, and very similar effects are expected from the Jadar project. It is indisputable that the revitalization of the Bor mine was of great importance for the local economic activity – 20 percent of the employees and more than half of the wages paid in the Bor area. In the case of the Jadar project, the effects would be similar, but still somewhat smaller, since the surroundings of Loznica have a different economic structure and there would be a shutdown of certain economic, primarily agricultural, activities. By no means should we leave out the effect on the environment either – despite Ziđin’s alleged efforts to reduce pollution, Bor is the “black point of the Balkans”. The problem of growing pollution coincides with the start of work and increased production. Would it be the same in the case of Jadar, is one of the main questions to which there seems to be no credible answer.
The fiscal moment is also important. As a major investor, Rio Tinto would effectively be exempt from paying corporate tax up to the amount it invested in the project – paradoxical but true, just like Ziđin. To conclude, the effects of those two investments would be comparable, they have positive sides – although not close to hyperbolic claims, for the fulfillment of which a clear strategy and a more meaningful fiscal policy are needed. Both investments, unfortunately, have negative effects, primarily on the environment. This analysis is neither for nor against the Jadar project per se. The situation in which Rio Tinto finances economic and environmental impact studies certainly has a negative effect on the credibility of the facts. Telling fairy tales has an equally negative impact. Maybe it would really have more significant economic effects, but there is no one to plan them and convince us of that. It might not have an irreparably negative impact on the environment, but no one can guarantee that. This is also the key development problem of Serbia. At this moment, I am closer to the point of view that Serbia is not institutionally mature for something like this.
Economist Nebojša Katic also wrote about the economic effects of the Jadar project more than a year and a half ago. “If Rio Tinto start with exploit and export of ore from Serbia, export revenues will increase Serbian GDP, but these revenues belong to Rio Tinto and, as a rule, do not stay in Serbia.” Serbia will have mineral rent from that, maybe Rio Tinto will pay some taxes, and some will even get a salary working for Rio Tinto. This is where the financial benefits for Serbia will end and they will be incomparably less than the statistical growth of GDP,” Katic wrote in the author’s text, with the remark that “economists really like indirect effects because they can estimate, magnify and manipulate them as much as they want, or as much as they are paid”. The words of Luka Erceg, a native of Canada, originally from Loznica, master of law and economics and director of a company in the USA that manages investments, have even greater specific weight. All the more so since until 2013 he ran a company for the production of lithium in the USA, about which he also spoke to the leading world media, the New York Times, Bloomberg and CNN, and in 2012 he spoke about strategic minerals in the US Congress. “The Jadar project will never be able to compete economically with lithium extraction projects from salt water, which are being developed around the world.” I would recommend that Serbia explores old oil and gas sources, because in many of them, economically profitable amounts of lithium have been found,” Erceg claims for NIN.
“Extraction from salt water is more economical and can withstand falling prices.” If we insist on the Jadar project, it will be shut down in a few years, because lithium from salt water will lower the price. More and more such will arrive from the “lithium triangle”, which consists of Argentina, Bolivia and Chile. Furthermore, lithium for car batteries is not obtained from rocks, because it has too many impurities,” explains Erceg, noting that everyone forgets that lithium batteries last for ten years, and that they can be recycled afterwards. “That’s why eventually we won’t need to produce as much lithium as we do today, because even after recycling it will be able to be used as if it had just been taken out of the mine.” It would therefore make more sense for Serbia to encourage factories for the production and assembly of lithium batteries, which are large and heavy, so local production has advantages. Such a technologically advanced industry would also be stimulating for students of engineering, electrical engineering, chemistry… and that is why it is better to deal with it than ores. I would praise the government for developing technological industries and in general I would recommend it to focus on “knowledge industries,” because the lithium mine will not create many new jobs,” Erceg points out. “After all, it is not impossible to have a lithium mine like the ones that exist in Australia.” But look at the pictures of the disasters those mines have created. At the same time, what exists in Australia does not exist in Serbia. Australian mines work because ore is sent to China for processing. When the ore is processed there, there are also battery manufacturers nearby. Where will Jadar send his ore or his lithium?” The already fantastic story of Serbian officials about lithium billions could hold water as much as possible while the demand and prices of that metal on the world market were breaking records month after month. Meanwhile, the situation has changed dramatically. On April 28, global media reported that the price of lithium carbonate had fallen to an 18-month low, from a record high of $86,170 to around $52,000 per metric ton. In March of this year, somehow just at the time when Vučić brought back to the public the story of the greatest missed opportunity, the price fell by 64.22 percent compared to March 2022. And at the same time, world agencies do not cite the key reason for such a price drop only a weak demand, but an abundant supply.
At that time, experts estimated that the drop in lithium prices would be reflected in the drop in prices of electric cars, if their sales would not increase. And then, when the sale of electric cars increases, one could also expect a recovery in lithium prices… But that was obviously a long shot. Meanwhile, the decline continued on the first working day of this week, on September 4, a ton of lithium carbonate cost $27,861 on the world market, and just a month before that it was $37,612 or 35 percent more. The dramatic decline is even better evidenced by the fact that the price of lithium a little less than two years ago was almost three times higher than it is now. This time, lower demand contributed to the decline, not much higher than the lowest at the beginning of the pandemic, in April 2020. Despite this, Serbian officials have not changed their story, as if they are still basing their calculations on record lithium prices. It was as if time and everything else had stopped. Everything except an effort to revive the fairy tale about the economic effects that Serbia would have if the Government decided to change its position and still enable lithium mining. However, Minister Momirović was right when he said that “we will only see how this story unfolds in the coming period, but we cannot ignore the perspectives it opens up.”
The demolitions are part of a deal brokered with Vice Chancellor Robert Habeck and Economics Minister for North Rhine Westphalia, Mona Neubaur, that is supposed to see RWE wind down its coal operations by 2030. RWE is Europe’s second largest CO2 emitter from coal power stations, and has razed over 100 villages in the Rhineland region to make way for its coal operations. Germany’s government is still aiming to exit coal by 2030.
“The current climate emergency requires urgent and concerted efforts to accelerate the deployment of every single wind turbine, solar panel and heat pump that we can muster. Anything that diverts from this critical endeavour, especially the dismantling of renewable energy sources to extract more fossil fuels, must be unequivocally prohibited,” said Fabian Hübner, senior campaigner in Germany at Beyond Fossil Fuels.
Thanks to the project, the enterprise improved pellets quality and obtained an opportunity to enter new iron ore raw materials sales markets.
Both stages of the factory technological sections can process ore from the Pershotravnevoye and Gannivske deposits with a three-stage crushing scheme. The design capacity of the factory is 30.5 million tons of ore per year with the ability to produce concentrate with the iron content of 65.8%.
To produce 68% concentrate the company had to merge sections at the first stage and assemble new routes to transport products between them.
Aurubis, Europe’s leading copper producer, has issued a warning of potential losses in the hundreds of millions of euros after falling victim to a massive scam involving shipments of scrap metal utilized in its recycling operations. This revelation caused shares in the company to plummet by as much as 18%. Aurubis suspects that certain suppliers manipulated information regarding the scrap metal they supplied and colluded with employees in the company’s sampling department to conceal the discrepancies.
This incident has raised concerns about Aurubis’ security controls, particularly in light of the company’s announcement in June about uncovering a theft ring targeting products containing precious metals. Notably, the two incidents seem to be unrelated.
The scam specifically pertains to materials procured for Aurubis’ metal-recycling business. In addition to raw materials from mines, the company acquires significant quantities of copper-bearing scrap, ranging from nearly new manufacturing offcuts to old cables, pipes, and electronic circuit boards. Every day, Aurubis processes thousands of tons of these materials to produce refined metal.
According to Angela Seidler, Vice President for Investor Relations and Corporate Communications at Aurubis, the company’s recycling suppliers seemingly manipulated information about the raw materials delivered to them and collaborated with employees in the sampling department to conceal the discrepancies. Suppliers provided estimates of the material’s content, and after a visual inspection, Aurubis’ laboratories analyzed the metal content and paid the firms based on these assessments. However, discrepancies were discovered during the production process over time. For example, in the case of copper, it takes approximately four weeks for the material to be processed.
Aurubis is currently conducting a comprehensive check of its metal reserves, which is expected to be completed by the end of September. The investigation also involves Germany’s state office of criminal investigation.
Previously, Aurubis had projected operating earnings before taxes for the 2022-23 financial year in the range of €450 million to €550 million. However, the company no longer anticipates achieving these projections and has warned of potential losses in the “low, three-digit-million-euro range.” Steelmaker Salzgitter, which holds a 30% stake in Aurubis, has also suspended its results guidance for the financial year.
While this incident is indeed serious, Aurubis believes that its impact will be absorbed within the current fiscal year and will not affect the company’s expansion plans and strategic priorities.
In June, Aurubis had previously reported that the public prosecutor’s office and the police were investigating a suspected theft ring. Searches were conducted at several Aurubis employee workspaces and on-site offices of contractors at the Hamburg site as part of the investigation. This incident appears to be separate from the recent scam, though it is still too early to determine if the two cases are interconnected.
The metals industry has witnessed several scandals in recent years, including Trafigura Group’s revelation in February that it expected substantial losses due to an alleged systematic fraud involving nickel cargoes. Additionally, the London Metal Exchange shocked the market this year after discovering that some bags of nickel registered in its warehousing network contained stones rather than the expected metal.
The political groups within the European Parliament are pushing to enhance social and environmental safeguards for “strategic” mining projects in Europe and abroad as the EU seeks to secure vital raw materials for its green and digital transitions.
The Parliament’s industry committee is set to vote on the EU’s draft Critical Raw Materials Act, which aims to reduce the bloc’s reliance on China and other countries for metals like rare earths.
The proposal, unveiled in March by the European Commission, outlines benchmarks to increase domestic capacity for raw materials extraction, processing, and recycling. The aspirational targets correspond to 10%, 40%, and 15% of the EU’s needs, respectively.
EU member states voted in June to raise the Commission’s proposed benchmark for processing on European soil from 40% to 50%. Lawmakers in the Parliament’s industry committee support this 50% objective but have added an international dimension. They suggest that “up to 20% of the Union’s new processing capacity” could be developed through “strategic partnerships” with foreign countries.
These partnerships would be facilitated through “strategic projects” that receive expedited permitting rules and access to finance. However, they would also face closer scrutiny regarding environmental and social safeguards.
These moves have been praised by green campaign group Transport and Environment (T&E), which sees the establishment of safeguards as more important than voluntary targets. Julia Poliscanova, Senior Director at T&E, emphasized that these safeguards would ensure that environmental and social standards are met.
Strategic projects can encompass all stages of the raw materials supply chain, from mining to processing and recycling. They must be mutually beneficial for both the EU and the host country, according to the draft Parliament report.
The EU is currently in discussions with Chile to establish a strategic partnership on raw materials as part of a broader EU-Chile trade agreement. This partnership could facilitate the EU’s access to Chile’s significant lithium reserves.
The draft parliamentary report, authored by Nicola Beer, a centrist lawmaker from Germany’s liberal FDP party, underscores the need for diversifying raw materials supplies as a priority in the EU’s external action and diplomacy.
The European Parliament is also considering stricter sustainability requirements for critical raw material projects. This includes imposing more stringent conditions for EU-wide recognition of industry certification schemes. These schemes will need to have multi-stakeholder governance systems in place to qualify. Compliance with EU certification standards will be verified at the site level rather than the company level.
These certification amendments have broad cross-party support and are expected to pass. However, the fate of other aspects of the draft, such as stress tests for large companies and funding for self-sufficiency targets, remains uncertain.
After the industry committee vote, the draft Critical Raw Materials Act is expected to be voted on in the European Parliament’s plenary session on September 11. This will initiate negotiations with EU member states to finalize the law.
Germany, a nation lauded for its technological excellence and dedication to ecological sustainability, stands at a crucial juncture concerning the trajectory of its mining and resources sector.
Throughout history, mining has been a cornerstone of Germany’s economy. However, today, this industry grapples with an array of challenges that necessitate a harmonious approach. Balancing the imperatives of economic expansion, environmental preservation, and reducing dependence on foreign resources is of paramount importance.
Germany, renowned for its technological prowess and commitment to ecological sustainability, stands at a critical juncture in shaping its mining and resources sector’s future.
Throughout its history, mining has been a linchpin of Germany’s economy. Nevertheless, the sector now confronts an array of challenges that necessitate a harmonious approach. Striking a balance between economic expansion, environmental preservation, and reducing reliance on foreign resources has become imperative.
Juergen Wallstabe, representing the German-Australian Chamber of Industry and Commerce, points out that although mining activities have waned across Europe over several decades, Germany has expanded its global presence in the resources sector. High-tech METS companies in Germany are increasingly exporting innovative and technologically advanced solutions worldwide.
Wallstabe is optimistic that IMARC will provide a platform for established and emerging German firms to enhance their reputation for technological excellence and innovation.
“Germany’s leading position in engineering and manufacturing has resulted in a world-leading METS sector,” Wallstabe emphasizes. “We are convinced that on the one hand, German METS companies can support the Australian and other mining industry operators to reach their targets related to safety, productivity, efficiency, and decarbonization. On the other hand, Australia is a valuable partner for Germany’s resources needs.”
IMARC has been highlighting the industry’s environmental impact and its role in fostering a sustainable, decarbonized economy in recent years. A particular focus has been on the often-unwelcome legacy of mining operations, which have left lasting scars on landscapes, disrupted ecosystems, and polluted water sources.
Wallstabe highlights that IMARC offers an opportunity to showcase how Germany’s emphasis on environmental protection has led to stringent regulations for mitigating these legacy impacts.
“Germany’s commitment to remediating and restoring abandoned mining sites demonstrates our dedication to healing environmental wounds. IMARC offers a chance to share our experiences and learn from others facing similar challenges,” he notes.
Energy security is back in the spotlight in Europe, partly driven by the ongoing conflict in Ukraine and the need for reliable energy supply. Germany’s ambitious Energiewende (energy transition) plan aims to phase out nuclear power and significantly reduce carbon emissions by promoting renewable energy sources. Consequently, the focus has shifted towards sustainable mining practices supporting the production of materials crucial for renewable energy technologies, such as lithium for batteries and rare earth elements for wind turbines and solar panels. This presents an opportunity for the mining sector to contribute positively to Germany’s energy transformation.
Wallstabe notes, “To manage the energy transition, Germany’s and Europe’s need for critical minerals will increase dramatically for the foreseeable future. Australia is already and will continue to be a key player in securing a steady supply of critical minerals. Wind turbines need steel, copper, and strong magnets with rare earths minerals. Batteries consist of a wide range of critical minerals like Lithium, Manganese, Copper, Nickel, Cobalt, and the hydrogen industry needs Platinum, Iridium or Scandium. All resources that Europe struggles to produce in sufficient quantities.”
IMARC spokesperson Paul Phelan underscores the significance of Germany’s strong representation at the event. He believes that delegates can anticipate a showcase of Germany’s renowned innovation, particularly within the mining sector.
“It is clear that Germany’s public and private sectors are investing in the long term, with its research institutions and companies actively exploring novel technologies to enhance resource extraction efficiency, reduce environmental impacts, and improve worker safety,” says Phelan.
“Automation, digitalization, and artificial intelligence are becoming integral to modern mining practices, enabling better resource management and reduced ecological footprints. IMARC offers an opportunity to witness how a technological giant like Germany is leading the way.”
Germany’s mining industry, like that of other advanced nations, is closely linked to global supply chains. Ensuring ethical sourcing and responsible procurement of minerals from abroad becomes crucial in upholding the nation’s commitment to sustainability.
Finland, on the other hand, adopts a different approach to secure critical minerals, emphasizing e-waste recycling. Birgit Tegethoff, Senior Advisor at Business Finland Australia, highlights Finland’s leadership in e-waste recycling, with companies like Metso pioneering hydrometallurgical battery black mass recycling.
“The Finnish mineral industry has the circular economy heavily ingrained in its DNA, giving it a competitive edge in the global market. By increasing the use of recycled components in battery production, we can reduce the carbon footprint throughout our battery supply chain and lessen our dependence on international supply chains,” notes Tegethoff.
Developing strategic international partnerships in the green minerals sector is a top priority for Finland. Ilkka Homanen, the head of the Finnish delegation, has extended an invitation to Australian research institutes and the broader resource industry to engage at IMARC 2023 and join consortia aimed at solving green minerals value chain challenges.
Rolf Kuby, Director-General of Euromines, asserts that the issues facing Germany and Finland are not unique but are felt across Europe. He emphasizes the need to build a degree of open strategic autonomy and future-proof value chains.
Phelan highlights Europe’s profound energy transformation in alignment with the EU’s sustainability and innovation goals. He believes that events like IMARC provide a platform for leading economies to secure their “resources resilience.”
In addition to the Germany pavilion, a 90-minute German Program will be featured at IMARC 2023, curated by the German delegation and Chamber within the Global Opportunities Theatre.
Other programs featured at the event this year include Canada, Australia, Mongolia, Ecuador, Chile, Saudi Arabia, Quebec, Ontario, and South Korea.
Could Europe Face an Energy Crisis if Niger Halts Uranium Mining for France?
Amidst the aftermath of the coup in Niger, questions loom over the future of uranium supply, a cornerstone of the nation’s economy. Niger, nestled in the Sahel region, possesses extensive underground uranium reserves, making it a vital player in the global uranium market.
France, a former colonial power in Niger, faces a precarious situation. A significant portion, approximately two-thirds, of France’s electricity generation relies on nuclear power plants powered by uranium extracted from Niger. Furthermore, France exports electricity to European nations that lack their own nuclear power facilities.
With coup plotters holding sway in Niger for just over a month, concerns have surged regarding the uninterrupted flow of uranium to global markets. The implications of any disruption in this supply chain are profound, given France’s dependence on nuclear energy and its role as an electricity exporter to Europe.
To shed light on this critical issue, DW has sought insights from experts both in Niger and Europe, delving into the intricate web of the energy supply chain. As Niger’s uranium supply faces uncertainty in the wake of recent events, the consequences for Europe’s energy stability remain a topic of intense scrutiny.
Inequitable Relations Emerge Amidst Niger’s Political Shift
Following the coup in Niger on July 26, the diplomatic and economic ties between the two nations have entered a precarious phase.
The new military junta, led by General Abdourahamane Tiani, has displayed growing disenchantment with France. Upon assuming power, the junta swiftly enacted measures to disrupt the status quo, including suspending uranium exports and issuing a 48-hour ultimatum for the departure of the French envoy. Notably, Ambassador Sylvain Itte has defied expulsion orders and remains stationed in Niamey. Despite the junta’s actions, President Emmanuel Macron’s government is reluctant to relinquish its sway and access to essential raw materials. Nevertheless, patience in Niger for such imbalances is wearing thin.
Mahaman Laouan Gaya, a former Nigerien energy minister and former secretary-general of the Organization of African Petroleum Producers (APPO) until 2020, voiced the prevailing sentiment in Niger, emphasizing the glaring disparities in the partnership. Gaya pointed out that in 2010, Niger exported uranium valued at €3.5 billion ($3.8 billion) to France but received a mere €459 million in return.
Gaya further noted that if Niger were to decide against exporting uranium to France, the repercussions would be profound for France but hold limited impact on the Nigerien economy. The stark reality is that approximately 90% of Niger’s population lacks access to electricity, and exploitative pricing mechanisms have resulted in inadequate income from its exports. The growing sense of inequality in this partnership is a matter of concern as the dynamics between the two nations continue to evolve.
Is Uranium Production at a Standstill?
For decades, the French nuclear giant Orano (formerly known as Areva) has been engaged in uranium mining operations within Niger. The primary purpose of this material is to manufacture fuel rods intended for use in France’s 56 nuclear power plants.
Presently, there is uncertainty surrounding whether the junta’s imposed moratorium on uranium exports is being effectively enforced.
A spokesperson for the company recently informed the AFP news agency that the ongoing crisis has not had any immediate impact on Orano’s capacity to supply uranium.
In contrast, Hama Amadou, Niger’s former prime minister and a prominent opposition figure, shared a different perspective in an interview with Voxafrica. According to him, the mining company continues to produce uranate, the foundational material for uranium.
Amadou expressed skepticism regarding the notion that the new authorities had annulled the uranium mining contracts between France and Niger. He raised questions about why the French state appears concerned about its interests in Niger, given these circumstances.
As this situation unfolds, the status of uranium production remains uncertain, and differing viewpoints persist regarding its continuity.
French Control Over Niger’s Mining Operations Remains Strong
The largest uranium mine in the Sahara, situated on the outskirts of Arlit, is under the firm control of Somair. This mining company is predominantly owned by France’s state-owned Orano group, holding a 63% stake, while the remaining 37% is in the hands of Niger’s state-owned company, Sopamin.
In 2021, the Somair mine played a pivotal role, accounting for over 90% of Niger’s uranium exports. Furthermore, France and the previous government led by Mohamed Bazoum had reached an agreement to recommence operations at another mine.
Notably, in May, Orano solidified its presence in Niger by signing new contracts with the Nigerien government. These agreements extended French uranium mining activities in the country until the year 2040.
Nigerien journalist Seidick Abba has emphasized that the recent coup has not altered the existing commercial arrangements between these corporate entities. He clarified that uranium would continue to be transported from the mine near Arlit to France via Cotonou, emphasizing that the contractual terms do not grant Niger the authority to halt these shipments.
Despite the political upheaval, the junta lacks the means to obstruct these deliveries, underscoring the enduring strength of these arrangements.
Europe’s Alternative Uranium Suppliers
While France has been a significant recipient of uranium from Niger, accounting for roughly one-fifth of its supply, it is essential to note that alternative sources exist. Data from the Euratom Supply Agency reveals that Central Asian nations such as Kazakhstan and Uzbekistan have also played a substantial role in supplying uranium to France.
These alternative uranium suppliers provide France with diversification options, reducing its dependency on a single source.
As recently as 2022, Alex Vines from the London-based think tank Chatham House noted that Niger held the position of France’s third-largest supplier of uranium. However, Vines asserted that the level of dependence on Niger was somewhat overstated, as France engages in uranium trade with other nations like Kazakhstan, Australia, and Namibia. This diverse network of suppliers allows France to readily diversify its uranium sources, reducing reliance on any single provider.
According to the World Nuclear Association, Niger contributed only 5% of the uranium sold on the global market in 2022. Some analysts have raised concerns about potential price hikes and their far-reaching consequences if Niger’s uranium were to become scarcer on the international market.
In 2022, during a period when many power plants faced cooling water shortages, the dominance of French nuclear power within Europe became evident, resulting in increased energy prices.
To mitigate concerns regarding a possible energy crisis stemming from the situation in Niger, European Commission spokesman Adalbert Jahnz offered reassurance. Jahnz explained that the European Union (EU) maintains an adequate supply of natural uranium stocks, ensuring a buffer against short-term supply disruptions. He confirmed the presence of ample deposits on the global market, assuring that the EU’s medium and long-term uranium needs could be met without issue.
Uniper has announced its decision to retire the Heyden 4 hard coal-fired power plant located in Petershagen, Germany, in the coming year.
This energy company, predominantly owned by the German government with a 99.1% stake, had previously suspended commercial operations at the plant. However, it resumed operations in 2022 after divesting from Russian energy investments in the wake of the Ukraine invasion. The Heyden 4 power plant boasts a net capacity of 875 megawatts and currently employs a workforce of 95 individuals, as confirmed by Uniper. The official decommissioning date for the plant is set for September 30, 2024, according to the company’s announcement.
Holger Kreetz, the Chief Operating Officer of Uniper, expressed, “The forthcoming decommissioning in the autumn of 2024 marks a significant milestone for both the Federal Republic of Germany’s commitment to phasing out coal-fired power generation and Uniper’s broader portfolio transformation.”
Uniper has outlined its strategic objective to discontinue coal-fired energy generation entirely by the year 2029.