http://farm4.static.flickr.com/3285/3009628829_f127c08543.jpg?v=0

Mining Stocks

_____________

Of Note:

Canadian mining companies are pouring into Niger, undeterred by the growing risks of doing business in the
West African country, who see it as the next frontier for uranium.

Canadian mining companies have emerged the biggest winners in the wake of Niger's decision to break up the
traditional French monopoly on the uranium industry here in 2007.

Semafo Inc.  is moving into the uranium play, along with nearly a dozen other Canadian companies.

They are exploring for uranium in the famed Arlit uranium belt in northern Niger.

By one estimate, Canadian companies own 40 per cent of Niger's mining exploration permits.

The uranium spot price soared to $136 (U.S.) a pound in June, 2007, but has since retreated to about $48 a pound.



____________________________________________________________________________________________

To access my current posts, click the following link:
Notes From a Cyber Trader

___________________________________________________________________________________________________________________________________________






Uranium's next frontier: Niger

Responding to the siren call of 'one of the best uranium belts in the world,' Canadian mining firms are heading into Niger - despite rebel unrest, flak over 'slave wages,' and safety fears, highlighted by the kidnapping of two Canadian diplomats, Geoffrey York writes



GEOFFREY YORK
The  Globe and Mail
February 9, 2009 at 4:00 AM EST


http://images.theglobeandmail.com/archives/RTGAM/images/20090209/wrniger09/0209niger364big.jpg
A worker at a uranium mine in Arlit, above, in northern Niger, inspects rocks containing
uranium. Canadian company Semafo Inc., co-owner of a gold mine at Samira Hill in
Niger, is exploring for uranium in the famed Arlit belt, despite rebel activities in the north.
Canada has become the second-biggest foreign investor in Niger, behind France.
(Pierre Verdy/AFP/Getty Images)




NIAMEY, NIGER — Lured by the promise buried in its vast desert, Canadian mining companies are pouring into Niger, undeterred by the growing risks of doing business in the West African country.

Despite the mysterious kidnapping of two Canadian diplomats late last year, Niger is attracting a horde of Canadian investors who see it as the next frontier for uranium.

Canadian mining companies have emerged the biggest winners in the wake of Niger's decision to break up the traditional French monopoly on the uranium industry here in 2007. Boosted by heavy investments in gold mining and uranium exploration, Canada has become the second-biggest foreign investor in Niger, behind France, the former colonial power.

But the Canadian presence is a controversial one. Rebel groups are demanding a bigger share of Niger's natural resources, including the Canadian mining projects, and opposition politicians have accused the biggest Canadian investor of paying "slave wages" - a charge denied by the company.

Niger, which by some measures is the poorest country in the world, rarely hits the headlines. Nearly 70 per cent of its people live on less than $1 a day, and less than 7 per cent have access to electricity. It was briefly in the spotlight in 2002 when former U.S. president George W. Bush claimed - wrongly - that Iraq was buying "yellowcake" uranium from Niger.

When it was proven that Mr. Bush's allegation was based on forged documents, Niger sank into obscurity again - until the kidnapping of the Canadians.

Diplomats Robert Fowler and Louis Guay were kidnapped in the desert near Niamey last December.

By coincidence, Mr. Fowler and Mr. Guay had been visiting the Canadian-owned gold mine at Samira Hill, southwest of Niamey, just hours before their abduction.

The gold mine's operator and co-owner, Semafo Inc. of Montreal, is the leading Canadian investor in Niger. Its mine at Samira Hill is the second-biggest private employer in the country, with about 600 workers.

After investing $100-million in the site, Semafo says it has produced 300,000 ounces of gold from the mine in the past four years, and it has 2.5 million ounces still remaining. The mine is the largest industrial project in Niger since the 1960s, according to Semafo president Benoît La Salle.

But now Semafo is moving into the uranium play, along with nearly a dozen other Canadian companies. They are exploring for uranium in the famed Arlit uranium belt in northern Niger - despite rebel activities in the north. By one estimate, Canadian companies own 40 per cent of Niger's mining exploration permits.

"Niger has been blessed with one of the best uranium belts in the world," Mr. La Salle said in an interview. "It's a fantastic belt. And now there's a uranium rush."

The uranium spot price soared to $136 (U.S.) a pound in June, 2007, but has since retreated to about $48 a pound. Still, at current levels, prices are four times higher than they were in 2003. Niger last month signed a deal with Areva, the French nuclear giant, to develop one of the biggest uranium mines in the world. The $1.5-billion deal will make Niger the second-biggest uranium producer in the world.

Cameco Corp. of Saskatoon, the world's largest uranium producer, is among the Canadian companies that have poured into Niger in search of uranium. Last year it announced that it had formed a strategic alliance with Govi High Power Exploration Inc. (GoviEx), which holds 4,700 square kilometres of uranium exploration assets in Niger.

Under the deal, Cameco acquired 11 per cent of GoviEx for $28-million, and it has the right to boost its ownership stake to 48 per cent over the next four years for between $145-million and $212-million. The president and chief executive officer of GoviEx is Govind Friedland, the son of Robert Friedland, the famed mining tycoon who heads Ivanhoe Mines Ltd. of Vancouver.

"Canada is a wonderful place to do business, but as we move out to other parts of the world, we deal with greater security issues, and Niger would certainly fall into that category," Cameco spokesman Lyle Krahn said in an interview.

"It provides diversification for Cameco, for our uranium portfolio worldwide, and it looks like a promising exploration property in an area that has a long history of uranium mining," he said.

Even after the kidnapping of the Canadian diplomats, the Canadian investors have remained enthusiastic about Niger's prospects. Semafo continues to send its employees on the same highway where Mr. Fowler and Mr. Guay were abducted. "It was safe and it remains safe," Mr. La Salle said. "It's business as usual. We've driven on this road for 10 years and never had any kind of risk."

Semafo, he says, has been a "victim" of the global publicity over the kidnapping incident. "It's attracted a lot of attention to us, and we had nothing to do with it."

In Niger, however, Semafo has been attracting attention for years. A bitter strike by 130 mine workers in 2006 was resolved only when Semafo fired the workers and hired replacements. This led to a parliamentary inquiry, and opposition leaders have accused Semafo of paying inadequate wages, causing environmental damage and failing to share its profits with the local communities.

"The wages are very low," said Mohamed Bazoum, deputy chairman of the largest opposition party. "The population is not benefiting at all from this gold."

Mr. La Salle dismisses the complaints. "The opposition are attacking every company in the country to make the government look bad," he said. "This is local politics - we don't get involved."

The workers who were sacked in 2006 had engaged in violent and illegal activities during their strikes, he said. Since then, there has been no turnover in the mine's staff because its wages are "considerably higher" than other wages in the country, he said.

Semafo is providing extensive benefits to the local population, including an education program and a health program that gives free medical care to 10,000 patients a year, Mr. La Salle said.

With a file from reporter

Andy Hoffman in Toronto.

***


By the numbers



$48 (U.S.)
The approximate uranium spot price per pound. The price soared to $136 (U.S.) a pound in June, 2007, but has since retreated. Even at current levels, prices are four times higher than they were in 2003.


$1.5-billion
Amount of deal signed last month between Areva, the French nuclear giant, and Niger. The development of one of the biggest uranium mines in the world will make Niger the second-biggest uranium producer in the world.


600
Number of workers employed at the Samira Hill mine by Montreal's Semafo Inc. The mine is the second-biggest private employer in the country.


$100-million
Amount Semafo has invested in the site.




http://business.theglobeandmail.com/servlet/story/RTGAM.20090209.wrniger09/BNStory/Business/home



____________________________________________________________________________________________________