December 20, 2008 / 11:42 AM / 11 years ago

Areva's Niger uranium mine to go ahead despite price fall

NIAMEY, Dec 20 (Reuters) - French nuclear power group Areva CEPFi.PA will press ahead with its plan to build a 1 billion euro ($1.40 billion) uranium mine in Niger despite falling world prices for the fuel, the firm said on Friday.

The Imouraren mine, due to begin commercial production of 5,000 tonnes per year in 2010, would make the West African desert state the world’s second biggest source of uranium.

French state-controlled Areva renewed its uranium mining deal with Niger in January 2008, when prices UX-U308-SPT were around $90 per lb, almost double their most recent recorded level of $53 on Dec. 16.

“The price of uranium is coming down on world markets, but the agreements we signed in January protect Niger,” Chief Executive Anne Lauvergeon said on state television late on Friday, after meeting Niger’s President Mamadou Tandja.

Several African mining projects have been put on ice as prices of minerals have crashed in the past six months.

Rio Tinto (RIO.L) said earlier this month it was postponing development of $6 billion Simandou iron ore project in Guinea as part of a cost-cutting package, while dozens of copper and cobalt miners in Democratic Republic of Congo have either delayed development or suspended operations altogether.

Areva’s Lauvergeon was visiting Niger only days after a U.N. special envoy to the country went missing, with a rebel Tuareg group first claiming then denying it was holding him.

Tuareg dissidents are fighting a campaign for autonomy in the uranium-producing north, where they have attacked Areva employees.

Rebel group Niger Justice Movement said in June it carried out the kidnapping of four workers from Areva’s Cominak mine near the northern town of Arlit. As well as Cominak, Areva also runs the Somair mine in Niger, while China Nuclear International Uranium Corp is developing the Teguida mine.

Reporting by Adboulaye Massalatchi; Writing by Daniel Magnowski; Editing by Victoria Main

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