Tom Bell, a State College, Pa., consulting geologist, makes two startling predictions for Niger’s vast uranium resources.
First, Bell, who presented at the recent U2009 Global Uranium Symposium, held in Keystone, Colo., believes the country will move to the first line among uranium producers — perhaps even becoming the world’s number one producer.
Currently, Niger is the world’s fourth-largest uranium producer, behind Canada, Australia and Kazakhstan.
The decisive addition to the country’s production profile is anticipated to come from Areva’s (ARVCF-O) huge Imouraren project, 80 km south of Arlit, scheduled for commissioning in 2010. At full production, expected in 2012, Imouraren will produce 5,000 tonnes uranium oxide per year, on par with the anticipated combined production from the Khorasan 1 and 2 projects in Kazakhstan, and ahead of BHP Billiton’s (BHP-N, BLT-L) Olympic Dam mine in Australia, which produces 4,000 tonnes U3O8 per year.
(A planned expansion at Olympic Dam is expected to raise production initially to 4,500 tonnes; the mine’s measured, indicated and inferred resources, at 2.3 million tonnes of uranium oxide, dwarf all of Niger’s known resources.)
Bell’s second prediction concerns the fate of Niger’s uranium resources.
“Ultimately, the Chinese and the French will own the (Tim Mersoi) basin,” he said in an interview.
While the kingpin in the country’s uranium industry has long been French nuclear giant Areva, China entered Niger only last year. Together with Niger’s government, four Chinese companies are developing the US$140-million Azelik (or Azalik) uranium mine: SinoHydro, SinoUranium, China National Nuclear Corp. and Beijing Zxjoy Technology & Trade. Azelik, with 12,800 tonnes U3O8 in reserves, is being developed by Somina — a Chinese, Nigerois and Korean joint-venture company.
China’s interest in energy resources is not new, and the country has recently accelerated the pace of its investments in the sector. Using its deep pockets, and taking advantage of low prices of energy assets, China has concluded a spate of oil deals with Venezuela, Brazil, Kazakhstan and Russia, and uranium mining deals with Kazakhstan.
Bell predicts that China will now pick up stakes in uranium projects in Niger from exploration companies starved of capital in the current tough markets, propelling China to a dominant position in Niger’s uranium sector. He expects a round of acquisitions, joint ventures and takeovers, resulting in consolidation of exploration permits.
“Chinese involvement may be more widespread than commonly thought,” Bell says.
Bell, who heads his own firm, Stratamodel, went to the West African country for the first time in 1987 to explore for gold. More recently, since 2007, he has been a consultant to uranium explorers, and conducting radiometric soil surveys to detect radioactive radon gas, which can indicate uranium targets in the prospective Tim Mersoi basin, west of the Air massif.
In his U2009 presentation in May, Bell said that since 1971, the country has produced a total of 104,000 tonnes U3O8. And from 3,150 tonnes production in 2006, annual production is projected to exceed 10,000 tonnes in 2012.
Areva says Imouraren, which will cost n1.2 billion to build, is the largest uranium deposit in Africa and second worldwide only to Olympic Dam. Once completed, the mine will be immense: Bell says that it will be 8 km long, 2.5 km wide, and between 140-175 metres deep, making it the largest open-pit uranium mine in West Africa. It will intersect three aquifers, creating considerable dewatering challenges. Areva owns two-thirds of Imouraren, and Niger’s government one-third.
The company will excavate a staggering 3.8 billion tonnes of rock at Imouraren to mine 131 million tonnes grading 0.11% uranium oxide, for 180,000 tonnes. Mine life is estimated at 35 years or more, from 2012.
The Tim Mersoi basin is the focal point of uranium mining and exploration in the country, and Bell notes another three deposits, which, together with Imouraren and Azelik, make up most of the country’s known uranium resources. The three are the Arlit (or Somair) and Akouta (or Cominak) mines, and the Madouela exploration project.
Arlit, owned 63% by Areva, and 37% by the government of Niger, has reserves of 23,000 tonnes U3O8, plus resources of 24,000 tonnes.
Akouta, with 24,300 tonnes U3O8 in reserves, is 34%-owned by Areva, 31% by the government of Niger, 25% by OURD of Japan, and 10% by Enusa of Spain.
The Madouela (or Madaouela) deposit, with 6,190 tonnes in historic resources, is owned by Govi-Ex Uranium, headed by Govind Friedland, son of Ivanhoe Mines’ (IVN-T, IVN-N) Robert Friedland. If Madouela goes into production, the government can take a stake of 10% or more in the project.
Shareholders in GoviEx include Semafo (SMF-T, SEMFF-O), with 12%, Cameco (CCO-T, CCJ-N), with 11%, the government of Niger, with 10%, and Trendfield, a Hong Kong company, with 10%. Cameco has the option to buy another 10% for US$31 million, and increase its stake further to 48% for US$145- 212 million.
Bell reports intensive exploration activity at Madouela, with multiple drill rigs on the property. In addition to its 2,300 sq. km there, GoviEx also has an early stage, 2,400-sq.-km exploration project, near Agadez.
Apart from the five leading projects, Bell says there is substantial grassroots exploration focusing on the Tim Mersoi basin. The geological setting is Devonian to Cretaceous. Production at Arlit and Akouta is from Permian rocks, and the setting at Azelik and Madouela is also Permian, while at Imouraren, it is Jurassic.
Bell does not rule out the possibility of a deposit being found in Cretaceous rocks, because of the presence of many radiometric anomalies.
Mineralization is in tabular sandstone deposits, with secondary mineralization in roll-front-style deposits, similar to the Morrison deposits on the Colorado Plateau. The Imouraren project holds three ore zones on top of a thick section of altered volcanic ash, similar to the Jackpile mine in New Mexico.
Although it is possible that uranium deposits exist outside the Tim Mersoi basin, Bell says that as exploration moves into remote areas deep in the Sahara, it is also getting farther away from any infrastructure.
Individual exploration permits in Niger cover 500 sq. km. The government has delineated 280 permits, of which 170 are granted, 85 are pending approval and 25 are open. A permit is granted for three years, during which time the explorer has to spend US$2 million. At the end of the period, the explorer can renew the permit over half the area. Bell says that the government may extend the three-year period owing to delays caused by a rebel insurgency.
In all, 29 companies hold exploration permits, of which SinoUranium is one. Three permit holders are from India, and one from Russia. Four come from unexpected fields: a financial services company, a health services company, a hotel chain and a restaurant chain.
Bell says that exploring in Niger is expensive and time-consuming. Companies have to bring all the equipment they need into the country, including vehicles, drills and exploration equipment.
But there is still a lot of potential for further discoveries. The Tim Mersoi basin is large and underexplored, especially away from the Arlit fault near the Arlit-Agadez road. However, a lot of historical exploration was done using airborne radiometric surveys, which Bell says is not very effective in Niger.
A secure environment is required for exploration and mining, and Bell says that security is improving in Niger. After two rebel groups signed ceasefire agreements with the government, the insurgency has stopped, and the rebels seem ready to settle.
In 2007, rebel activity was intense, and
insurgents attacked Areva’s camp at Imouraren, kidnapping four Areva expatriate staff, as well as China National Nuclear Corp. staff from another site.
The remaining question mark is the government’s ability to enforce law and order and stop the activity of robbers and cocaine smugglers. Last year, for example, Bell’s son, who works with him on radiometric surveys, lost his truck to armed robbers. Last December also saw the kidnapping of Canadian diplomats Robert Fowler and Louis Guay, since freed.
“Security is still a serious issue,” Bell said in his presentation. “Law and order out in the field remain elusive.” Explorers must arrange security for field work, making exploration even more expensive.
A new source of political uncertainty is last month’s dissolution of parliament by President Mamadou Tandja. The president plans a referendum to change the constitution to allow him a third term, a move opposed by parliament. There were reports of clashes between protesters and security forces.
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