2024-07-27 13:28:14
AA/Tunis
The French group Orano, specializing in nuclear fuel, reported a loss of 133 million euros in the first half of 2024, due to difficulties since the military regime came to power in Niamey exactly one year ago, African and French media reported on Saturday.
“These results are marked by a non-recurring and quite impactful event, which is the very deteriorated political context in Niger,” explained the group’s chief financial officer, David Claverie, as quoted by Jeune Afrique.
Despite the momentum created by the favorable context for nuclear energy, which is driving up the prices of natural uranium and the uranium conversion-enrichment sector, the group recorded a loss of 133 million euros, following a net profit of 117 million euros in the first quarter of 2023, the same media highlighted.
This loss is mainly attributed to “197 million euros” in “provisions and write-downs” taken during the semester, the financial director clarified.
The write-downs concern the operating license of the Imouraren deposit, withdrawn from the group by the Nigerien authorities in June (69 million), as well as the assets of its subsidiary Somaïr, which is in serious difficulty, the only mine operated by Orano in northern Niger since 1971, for an amount of 105 million euros. The group also set aside 23 million euros in provisions for various risks, including tax risks in the country, Jeune Afrique specified.
Exactly one year after the junta came to power, Orano’s only operating mine in Niger, located in the Arlit region, Somaïr, is currently unable to export its uranium concentrate production due to logistical difficulties, the same source emphasized.
In this context, Somaïr “finds itself in a situation of very significant financial difficulty that risks leading it to a cessation of payments in the short or medium term, in the coming months,” warned the financial director, as quoted by the same media.
“There are a few indications that show us that the local authorities are not at all in a position to facilitate exploitation. The fact that they withdrew our license is also a sign,” he pointed out.
Despite its troubles in Niger, the group confirmed its outlook for the end of the year, with stable revenue around 4.8 billion euros and an EBITDA margin maintained between 22% and 24% of revenue, finally indicated Jeune Afrique.
Since coming to power in July 2023, Nigerien military leaders have continually denounced foreign interference in the country’s affairs and defended its political and economic sovereignty.
It is in this context that they announced their intention to fundamentally review the operating system for local raw materials by foreign companies.
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Future Trends in the Nuclear Fuel Sector: Challenges and Opportunities
The recent financial struggles of Orano, a prominent French group specializing in nuclear fuel, highlight significant shifts in the nuclear industry landscape, particularly in regions like Niger. With a reported loss of €133 million in the first half of 2024, largely attributed to political instability and operational challenges, the situation underscores the fragility of foreign investments in politically turbulent nations.
The context surrounding Orano has been increasingly complicated since the military took control in Niger a year ago. The company’s inability to export uranium concentrate from its Somaïr mine due to logistical hurdles reflects broader trends where local governance and regulatory environments heavily influence business operations. With authorities withdrawing operational permits and imposing fiscal risks, the potential for instability in partnerships with foreign companies is amplified.
Moreover, as political tensions escalate, the military regime has expressed intentions to revise the exploitation framework for natural resources, emphasizing national sovereignty over foreign involvement. This could lead to a re-evaluation of operational frameworks for multinational companies in various sectors, including nuclear fuel, raising questions about the sustainability of their business models in such environments.
Despite these challenges, the nuclear sector remains buoyed by a global emphasis on sustainable energy solutions. The rise in uranium prices, coupled with a stable revenue forecast at approximately €4.8 billion for Orano, indicates a market that may still hold promise. As the industry shifts towards cleaner energy alternatives, the demand for nuclear power could rejuvenate interest and investment, even in politically sensitive territories.
Moving forward, companies operating within the nuclear fuel sector will need to navigate a complex landscape—balancing local political dynamics, operational viability, and the increasing pressure for sustainable energy solutions. Strategic partnerships, agility in operations, and proactive engagement with local authorities may dictate the success of nuclear ventures in the face of sovereignty-driven governance.
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