Niger's Uranium and Oil Sector Threatened by Rebels

AMSTERDAM () -- Landlocked African country Niger, not well-known for its economic strength, is currently hitting the headlines. Tuareg rebels have threatened to target foreign uranium and oil companies in the country if they do not receive additional shares of the revenues.

In statements made by the rebels in northern Niger, the group has warned all foreign mining companies to end their operations unless a deal is struck with the government to give the rebels a larger share in revenues. If these demands are not met soon, the Tuareg rebels have threatened to target international operations and possibly kidnap operators.

The Niger Movement for Justice (MNJ) has said that it wants the central government under President Mamadou Tandja to agree to a larger control by the rebels over the country's mineral resources, including iron ore, silver, platinum and titanium.

Statements made by representatives of MNJ, made up largely of Tuareg and other nomadic tribes, in Paris, indicated that main targets will be Chinese and Western firms such as the China Nuclear International Uranium Corporation (Sino-U) or Hunt Oil.

The Chinese companies have been accused of arming the Niger government in their fight against the rebels. Official warnings have been made and some Chinese officials have already been kidnapped. The MNJ demands that all countries with expatriates in the conflict zone who are there for exploration and exploitation of mining resources (and not development projects) must leave ... for their own safety.

Since 2006, a number of Chinese companies have been operating in Niger, awarded licences to explore for uranium. The exploration licences announced were the first for Chinese firms in Niger's uranium sector. The Chinese group is being led by China National Uranium Corporation (CNUC), currently searching for uranium at two sites, Madaouela and Teguidda, in the Agadez region, about 1,000 kilometres (600 miles) northeast of the capital Niamey.

Niger holds significant reserves of uranium, from which nuclear fuel is made. Uranium production in Niger peaked at 4,366 tonnes in 1981 and now stands at around 3,000 tonnes a year.

In March 2006, Canadian companies Northwestern Mineral Ventures [TSX-V:NWT; OTCBB:NWTMF] and North Atlantic Resources [TSX:NAC], also were awarded three uranium prospecting concessions.

Other uranium mining operations are in the hands of Compagnie Miniere d'Akouta (COMINAK), which is owned by the government in cooperation with French, Japanese and Spanish interests, and the remainder by the French-controlled Societe des Mines et de l'Air (SOMAIR).

Oil has also become a bone of contention, as the China National Petroleum Corporation is also exploring for oil in Niger's Agadez region. The country has proven reserves of some 300 million barrels of oil but needs to find more to become an economically viable producer.

China National Petroleum Corporation (CNPC) is choosing three sites to drill exploration wells in its Tenere Block. CNPC's contract states that the drilling must be completed by 2008. In Petronas' and ExxonMobil's [NYSE:XOM] Agadem Block, the companies discovered an estimated 350 million barrels of oil equivalent.

Oil exploration has been carried out for more than 20 years in Niger's Djado region on the border with Libya, but no commercial finds have been discovered.

In the last few months, the MNJ has increased its attacks on Niger military bases and mining corporations. Analysts are worried that the rebel group could start cooperation with other militants and possible al-Qa'ida related groups in Central Africa.

American military sources already have indicated that they are working in cooperation with the governments in the region, such as Niger, Chad and others, to quell a full military conflict. Niger militants also have been indicated to have received support from militants in Mauritania, Sudan and other instable countries.

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