Home » Niger Halts New Mining Licenses to Boost State Revenue

Niger Halts New Mining Licenses to Boost State Revenue

The West African nation seeks to increase its share of profits from the lucrative industry amid economic and political challenges.

by Motoni Olodun

Niger, one of the world’s top uranium producers, has temporarily suspended the granting of new mining licenses as part of an overhaul of its mining sector. The move aims to increase the government’s share of profits from the lucrative industry, which also includes gold and iron ore.

According to a memo from the mining ministry seen by Bloomberg, the country will also take stock of existing mining licenses and review the terms and conditions of the contracts. The ministry’s deputy secretary general, Fatimata Korgom, said in a voice note that the audit was a matter of “national concern” and that the government wanted to “figure out who holds the mining licenses and what reforms need to be implemented” to boost state revenue.

Niger’s decision comes amid a challenging economic and political situation for the West African nation, which was hit by a military coup in July 2023 that ousted President Mohamed Bazoum and triggered international sanctions. The coup leaders, who call themselves the National Committee for the Restoration of Democracy and the Rule of Law (CNRD), have promised to hold elections within a year and to respect the country’s mining agreements.

However, the mining sector, which accounts for about 5% of the country’s gross domestic product (GDP) and 40% of its exports, has been affected by political instability and the suspension of foreign aid. Niger recently missed a $38.7 million payment on a commercial bond, bringing the total missed principal and interest payments since the coup to $485 million. Last year, the country had to cut its 2023 budget by 40% after its Western allies, including France and the United States, froze their assistance.

The CNRD has also faced criticism from human rights groups and civil society organizations for its crackdown on dissent and its lack of transparency. The junta has banned protests, arrested opposition leaders and journalists, and shut down media outlets and internet access. It has also failed to provide details on its economic and social policies, its mining reform plans, and its dialogue with the international community.

Niger is not the only African country that has sought to renegotiate its mining deals in recent years. Several governments, including those of Tanzania, Zambia, and the Democratic Republic of Congo, have increased taxes, royalties, and state ownership of mining assets, arguing that they were not getting a fair share of the wealth generated by their natural resources. These moves have sparked disputes and legal battles with some of the major mining companies operating in the continent, such as Barrick Gold, Glencore, and Anglo-American.

Niger’s main mining partners are France’s Orano SA, which operates two uranium mines in the country, Toronto-based Global Atomic, which is developing a third uranium mine, and China National Nuclear Corporation, which has a joint venture with Orano for uranium exploration. The country also has several gold and iron ore projects, some of which are run by Canadian and Australian firms.

The mining industry has been a key driver of Niger’s economic growth and development, providing jobs, infrastructure, and social services to many communities. However, it has also faced challenges such as environmental degradation, social conflicts, and security threats from armed groups and terrorists. The country ranks last on the United Nations Human Development Index, with more than 40% of its population living in extreme poverty.

The mining reform initiative could be an opportunity for Niger to improve its governance, transparency, and accountability in the sector, and to ensure that the benefits of mining are shared more equitably among its people. However, it also requires a stable and democratic political environment, a constructive dialogue with the mining companies and the international community, and respect for the rule of law and human rights. These are the conditions that could pave the way for a brighter future for Niger and its mining sector.

Source: Mining.com

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