China says it is closely monitoring the situation in Niger following last week’s announcement that a military junta arrested the democratically elected President Mohamed Bazoum and established a military government.
The coup potentially drives a wedge between Niger and Western powers, who supported the democratic transition – Niger’s first since its independence from France in 1960. The coup is only the latest in the region, with similar upheavals happening in Mali, Chad, Guinea, Burkina Faso, and Sudan.
The Chinese Foreign Ministry has so far stuck to its usual talking points, calling on the parties involved to solve their differences through dialogue. Meanwhile, the IMF announced it is holding off on paying out a $131.5 million loan to Niger approved in early July.
However, China has a lot to lose in Niger. With FDI of $2.68 billion, it is the country’s second-largest foreign direct investor after France. As of 2021, there were an estimated 1,068 Chinese workers in Niger, working for 40 Chinese companies.
Major Chinese Projects in Niger:
- OIL: PetroChina has a production agreement with the Nigerien government at the Agadem oilfield, which has estimated reserves of 650 million barrels. The two also run the SORAZ oil refinery close to the Nigerian border. PetroChina holds 60% of the refinery business, which produces 20,000 barrels of refined fuel per day and mostly supplies Niger’s domestic market. PetroChina also signed an agreement in 2019 to build an oil pipeline from Agadem to the Beninese port of Cotonou. The project, which will see $4 billion in total investment, is about 63% completed.
- URANIUM: China National Nuclear Corp. signed a 2007 deal with the Nigerien government to develop the Azelik uranium mine. It owns 37.2% of the project, with a further 24.8% held by ZXJOY Invest, a Chinese investment entity. Niger lent $90.93 million from China in 2009 to develop the project. The mine’s estimated reserves come to 11,227 tons, with an annual production capacity of 700 tons. Just before the coup, Bazoum reportedly approached Chinese entities to discuss restarting production there, which had been halted due to a fall in uranium prices. Niger has some of the highest-grade uranium deposits in the world, with companies from numerous countries, including Canada, South Korea and France operating there.
WHY IS THIS IMPORTANT? While the Niger coup could benefit China in widening the distance between Niger and Western partners, its potential threat to major Chinese projects is likely to raise concern in Beijing.
SUGGESTED READING:
- Reuters: China’s Oil and Uranium Business in Niger by Andrew Hayley
- South China Morning Post: What the Niger Coup Means for China’s Presence in the Sahel Region by Jevans Nyabiage
