VZCZCXRO7372
RR RUEHMA RUEHPA
DE RUEHNM #1055/01 2621231
ZNR UUUUU ZZH
R 191231Z SEP 06
FM AMEMBASSY NIAMEY
TO RUEHC/SECSTATE WASHDC 2904
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHOT/AMEMBASSY OTTAWA 0550
RUEHMT/AMCONSUL MONTREAL 0055
RUEHQU/AMCONSUL QUEBEC 0005
RUEHON/AMCONSUL TORONTO 0001

UNCLAS SECTION 01 OF 02 NIAMEY 001055 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT. FOR AF/W: BACHMAN 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EINV ENRG EMIN NG
SUBJECT: SIGNS OF LIFE FOR NIGER'S BEST EXPORT AS NEW 
CANADIAN VENTURE SEARCHES FOR URANIUM 
 
NIAMEY 00001055  001.2 OF 002 
 
 
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SUMMARY 
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¶1.  (SBU) In a sign of heightened interest in Niger's uranium 
reserves, a small Canadian exploration company - Northwestern 
Mineral Ventures Inc. - has begun operations in a 4,000 
square kilometer concession centered on the northern Nigerien 
town of Ingal. World market prices for uranium are rising 
after two and a half decades of decline and stagnation. Niger 
is the world's fourth largest producer, accounting for 
approximately 10% - 15% of global production. However, since 
the early 1980s, little in the way of exploration has been 
attempted. Thus, the country still offers significant 
unclaimed tracts for exploration and exploitation. Against 
this backdrop, Northwestern's interest in Niger is 
significant both in its own right and as a suggestion of what 
is still possible here in Niger - substantial additional 
exploration and exploitation in an uncrowded field. For the 
people of the world's poorest country, that could equate to 
much needed foreign investment in their most lucrative - but 
long dormant - natural resource sector. END SUMMARY 
 
¶2.  (SBU) In a meeting with acting Econoff on September 18, 
Northwestern's Chief Financial Officer (CFO) Erik Martin 
described the company and its Niger venture. Northwestern is 
a small publicly traded company based in Toronto. 
Approximately 85% of its shareholders are Americans, though 
they collectively hold only 20% of the company's stock. 
Majority ownership is Canadian, though the firm is also 
listed on the New York Stock Exchange. With approximately $15 
million in the bank, Northwestern plans on investing $4.4 
million dollars in Niger exploration over the next three 
years. The company currently operates a uranium mine in 
Quebec and a gold mine in Mexico. Noting that Niger produces 
roughly 10% of the world's uranium, Martin argued that the 
country was attractive to small companies such as his, as 
large tracts remain unexplored and unclaimed by larger 
operators. Given rising global demand for uranium, Martin 
argued that exploration in environments such as Niger was a 
better investment now than at anytime in the last 20 years. 
 
¶3.  (SBU) Northwestern has obtained exploration rights to two 
tracts, which collectively total 4,000 square kilometers, 
located west of the city of Agadez. NOTE: Niger's active 
uranium mines lie in a straight line running 300km north from 
the city of Agadez to the city of Arlit. END NOTE Martin 
informed Econoff that Northwestern had already conducted 
aerial exploration of their concession and that results were 
promising enough to merit land-based exploratory efforts. 
Those efforts would be undertaken by a contractor - RSG Group 
of Ghana. RSG will establish base camps in the zone and begin 
intensive exploration from mid-October. In the event that 
exploration yields results, Northwestern would approach the 
Government of Niger (GON) for a separate exploitation permit. 
The company has established a Niamey office with seven 
full-time employees, and is about to open an office in 
Agadez. It expects to soon double the number of local 
employees and to continue hiring in the near-term. It has 
retained a former senior employee of the Ministry of Mines 
and Energy, an Agadez regional native, as its local chief of 
operations. For security purposes, the company has agreed to 
pay the Nigerien Army 2,000 to 5,000 CFA (approximately $5.00 
to $10.00) in per diem expenses for each of ten soldiers 
deployed to the site. 
 
¶4.  (U) Niger derives $27.5 billion CFA (approximately $53 
million) per year in revenue from existing uranium mining 
activities. This constitutes five percent of the national GDP 
(up from two percent in the late 1980s and 1990s, but down 
from a high of twelve percent in the 1970s). Long dormant due 
to market prices as low as $14.00 per unit, and exploitation 
of more accessible reserves in Australia, Canada, and 
elsewhere, Niger's uranium sector has been sustained by two 
public companies - SOMAIR (Socit des Mines de l'Air), and 
COMINAK (Compagnie Miniere de l'Akota). These two companies 
collectively employ 1,632 Nigeriens in their surface and 
subterranean mining activities. 
 
¶5.  COMMENT: (SBU) In recent years, popular anxiety over 
reports of chemical runoff from the mines contaminating the 
drinking water of Arlit and Tchighozerine has been balanced 
by public optimism over the rising price of uranium. While 
hopes for development based on gold mining or oil drilling 
are present in more muted form, Nigerien nostalgia for the 
 
NIAMEY 00001055  002.2 OF 002 
 
 
"good old days" of the 1970s uranium boom revives at the 
mention of any new venture related to this proven 
money-maker. At the same time, the uranium sector has not 
attracted the aggressive Chinese interest manifest in the oil 
exploration sector. Therefore, we expect the GON to be 
supportive of Northwestern's efforts, and to make reasonable 
efforts to clear bureaucratic roadblocks from the company's 
path. END COMMENT 
ALLEN