Areva SA, the French nuclear giant had bought UraMin Inc. in June 2007 for $2.5 billion. The junior Canadian uranium company, working in Africa, was only two years old at that time.
At the time of purchase uranium prices were also very high at $135 per pound as compared to the $55 a pound it is today. However, today Areva may not think of it as a good investment, as it takes a $1.46 billion write down on the assets of UraMin. The uranium market has been hit hard by a combination of the nuclear disaster at Fukushima in Japan after the tsunami earthquake and the general economic downturn.
The Trekkopje project in Namibia is also adding to their woes as the resource estimate at the deposit had come down from 45,200 tonnes to 26,000 tonnes. The drastic 42% reduction did come as a shock, but Areva did not wait for a metallurgical study to be conducted at the site by UraMin before it acquired the company.
Another problem area for Areva is in Niger where the locals near the world’s largest underground mine have seen their community heath deteriorate over the last four decades. Now residents are to be monitored for their health by the company. In Niger France has had a monopoly on operations in the uranium rich northern regions as it was the former colonial ruling power.
UraMin was founded by Stephen Dattels, a mining entrepreneur who helped build Barrick Gold Corp. in the 1980s.