Niger is a former French colony that became independent from France in 1960 and experienced single-party and military rule until 1991.
Public pressure forced multiparty elections, which resulted in a democratic government in 1993, however political infighting and military coups occurred until democratic rule was restored in 1999 with the election of Mamadou Tandja.
In 2009 President Tandja attempted to a constitutional amendment aimed at extending his term as President. In February 2010, a military coup deposed Tandja, immediately suspended the constitution and dissolved the Cabinet, and promised that elections would be held following a transitional period of unspecified duration.
In March 2011 multi-party elections were completed resulting in the election of Mahamadou Issoufou as President and a return to democracy. Niger is a landlocked, sub-Saharan nation that borders seven countries – Nigeria to the south, Chad to the east, Libya to the north northeast, Algeria to the north northwest, Mali to the northwest, and Burkina Faso and Benin in the southwest. Niger’s climate is mainly hot and dry, with much desert area. In the extreme south there is a tropical climate on the edges of the Niger River basin.
The terrain is predominantly desert plains and sand dunes, with flat to rolling plains in the south and hills in the north. Lake Chad is at the south-east corner of the country and is shared between Niger, Nigeria, Chad and Cameroon.
Niger is one of the poorest countries in the world with minimal government services and insufficient funds to develop its resource base. The country covers an area of 1.27M km2 and a population of 16.5M people.
The largely agrarian and subsistence-based economy is frequently disrupted by extended droughts common to the Sahel region of Africa. Niger also has sizable reserves of oil, and oil production, refining, and exports are expected to grow significantly between 2011 and 2016. Niger shares a common currency, the CFA franc, and a common central bank, the Central Bank of West African States (BCEAO), with seven other members of the West African Monetary Union.
French is the official language of Niger; however numerous local dialects are spoken by the general population.
Niger’s mineral sector accounted for about 3% of the GDP and for about 40% of exports. According to the International Monetary Fund (IMF), a renewed interest in the generation of nuclear energy has led to increased demand for uranium, encouraged investment expansions at existing uranium mines, and promoted exploration for new deposits.
Foreign direct investment in the sector from 2008 to 2012 was projected to be $1.4 billion, which would double the country’s uranium production capacity. In 2008, Niger was ranked as the world’s sixth largest producer of uranium. Other mineral commodities produced in the country include cement, coal, gold, gypsum, limestone, salt, silver and tin.
Uranium production in 2008 was an estimated 3,032t. Paris-based Areva NC continued with its plans to develop the world-class Imouraren uranium deposit located about 160km north of Agadez and 80km south of Arlit. Areva received a mining permit for the deposit in early January 2009 and the mine is expected to begin production in 2012 with about 5,000tpa U.
Gold production and exploration activity is associated with three Birimian greenstone belts located in the Liptako Region in the southwestern parts of the country near the borders with Burkina Faso and Mali.
Greenstone belts include the Gorouol/Kourki belt in the northwest of the Liptako area, the Sirba Belt to the west of Niamey, and the Tera Gassa Belt between the Gorouol and the Sirba greenstone belts.
Total gold production in 2008 decreased to 2,314kg from 3,427kg in 2007. The bulk of the production was from the Samira Hill Mine, 90km west of Niamey.
Niger Mining Legislation
There are four types of licence available for companies and individuals interested in exploration and development of mineral resources in Niger.
A Prospecting Authorisation gives the holder the right to search for one or a number of minerals. It is non-exclusive but confers to the holder the rights to first refusal to an exclusive exploration permit within the limits and time validity of the Authorisation.
Prospecting Authorisations are valid for one year, renewable indefinitely for one year periods. Surface and underground prospecting is permitted, as is the use of remote sensing techniques.
The objective of the prospecting programme must be stated in the application, although there are no fees or land holding requirements.
An Exploration Permit is valid for three-years, renewable for two further three-year periods subject to certain land holding reduction criteria and field works. The area held under a permit cannot exceed 2,000km2 in a rectangular block.
An Exploration Permit confers to the holder the right to dispose of any minerals obtained during exploration and testwork, and also confers the right to a Mining Permit if a viable reserve is discovered. Applications must stipulate the minerals sought (additional minerals can be included later), and a time and expenditure schedule.
A variable fee (CFAF 300,000) is tied to the permit, and holders are required to submit progress reports to the Government on their activities.
A Mining Permitwill be granted in the case of successful exploration, subject to the right of the Government to participate in the project. A ‘small mine’ permit is valid for five years, renewable three times for successive five-year periods, whereas a ‘large mine’ permit lasts for 20 years initially, renewable twice for successive periods of 10 years.
Further extensions are possible if commercial reserves remain. Companies applying for Mining Permits must conform to Nigerien company law. The Government requires an initial 10% share in the mining project, free of all costs, which can be later increased to a maximum of 33% through share purchases. Fees for mining permits are about US$1,400 and US$2,000 for small and large mining permits respectively.
The fourth type of licence is the Authorisation for Small-Scale Miningthat applies to artisanal mining.
Fiscal Regime and Commercial Legislation
The Government welcomes overseas private investment as a key to relaunching the national economy, and the new mining code contains a number of incentives for potential investors.
These include income tax holidays and many exemptions (customs duty exemption, exemption in some cases from value-added tax, the right to remit dividends freely), equal opportunities for overseas and national investors, and guaranteed freedom from nationalisation or expropriation.
Mining companies are subject to a number of fees and taxes. Annual area fees are related to the licenses except to the prospecting authorisation. Mining royalties are payable at a rate of 5.5% of the final selling price of the mineral commodity produced.
Royalties are, however, deductible from income tax, which is levied at a rate of 45% after the deduction of operating and production costs. Small mines enjoy a two-year income tax holiday, whereas for large mines this period extends to five years from the start of commercial production.
Dividends distributed to shareholders attract a 16% capital gains tax. Other charges include stamp duty, public notary fees, value-added tax and social security contributions for employees. Customs duties are not charged on equipment imported for use for direct mining operations, or temporarily for exploration programmes. Mineral products may be exported free of duty.