Caspian region becomes critical for France’s uranium imports – La Gazette

Oil&Gas Materials 4 May 2023 09:54 (UTC +04:00)
Caspian region becomes critical for France’s uranium imports – La Gazette

BAKU, Azerbaijan, May 4. Today, the partnership between Azerbaijan and the countries of Central Asia is more flourishing than ever. At the same time, cooperation in the area of transportation and logistics is of main focus right now. Complex geopolitical reality has forced to reroute cargos going from East to West. And Azerbaijan’s role in this regard has only increased. Azerbaijan provides very valuable transportation route for Kazakhstan, and not only for its oil exports, but also for uranium. Azerbaijan is also a transit country for petrochemicals and fertilizers from Turkmenistan. These cargos are primarily important for the European countries. For instance, Uzbekistan also strives to launch supplies of its resources, in particular, uranium, to Europe. The country is currently in talks with France in this regard.

As an article in the French La Gazette online newspaper reads, trade and transport routes were the focus of Uzbek President Shavkat Mirziyoyev's discussions during his official visit to France on 21-22 November 2022, following a busy autumn of meetings aimed at strengthening ties between the EU and Central Asia.

The increased engagement between these geographically distant regions comes as Russia's war in Ukraine prompts both sides to seek closer partnerships and new trade routes.

Increased trade was one of the key commitments made during talks between Mirziyoyev and French President Emmanuel Macron on 22 November 2022.

President Mirziyoyev devoted much of his visit to promoting investment in Uzbekistan, presenting his country as a stable investment opportunity in an unstable world.

"We are trying to ensure that Uzbekistan is associated, for the foreign investor, above all with stability and predictability," President Mirziyoyev assured the French business leaders on the sidelines of his visit to Paris..

Among the French industrial giants represented were aircraft manufacturer Airbus, water and waste management company Suez, rolling stock company Alstom, renewable energy company Total Eren, French state-owned electricity generation and supply company EDF (Électricité de France), investment bank Natixis and international nuclear fuel cycle expert Orano.

Tashkent wants to take advantage of Uzbekistan's participation in the EU's Generalised System of Preferences, which exempts members from paying import duties.

Last year, Uzbekistan was granted enhanced GSP+ status, which allows it to export 6,200 products duty-free to the EU in exchange for commitments on good governance and sustainable development.

Tashkent wants to increase its exports to the EU to $700 million next year and double the number of products exported to 600, Uzbekistan's foreign minister Vladimir Norov announced at the recent EU-Central Asia connectivity conference.

Total trade between the EU and Uzbekistan amounted to 2.8 billion euros in 2021, well below the $7.5 billion and $7.4 billion the country traded with Russia and China respectively.

According to the President Mirziyoyev 's office, the figure for trade agreements signed during his visit is approximately 6 billion euros, but no further details are given.

To achieve the goals set, it is essential to develop other trade routes between Central Asia and Europe, now that the shortest route through Russia is no longer feasible because of the war in Ukraine.

Norov stressed the need to develop the Trans-Caspian International Transport Route (TTIR), or "Middle Corridor", which bypasses Russia and crosses the Caspian Sea. The EU and Central Asian countries, including Kazakhstan and Uzbekistan, are working to eliminate bottlenecks, but this will take several years.

As Euromonitor International, a provider of market analysis, noted in a recent report on the trade potential of the EU and Uzbekistan, "the lack of maritime access and the long physical distance to the EU's main production centers could be barriers that limit some of the growth potential".

"This is why it is essential to further develop maritime, land and rail links with EU markets," the report said.

On the sidelines of his latest visit to Paris, Mirziyoyev also signed a three-year cooperation agreement (until 2025) with the French Development Agency for projects in agriculture, energy, water, transport, finance and the green economy, worth a total of 1 billion euros.

However, discussions on a possible collaboration with Orano on the construction of a nuclear power plant to solve Uzbekistan's rampant energy shortages were not disclosed.

Emmanuel Macron has pledged to modernize and develop the country's nuclear industry in a dramatic policy reversal, reversing his predecessor's pledge to cap the share of nuclear power supplying France at 50 percent - down from the current 70 percent, the highest in the world.

The French president has proposed the construction of six new French-designed EPR2 reactors, to come on stream from 2035, with an option for eight more. The bill aims to streamline the administrative and bureaucratic processes required to approve and build new plants. It also removes the 50 percent cap introduced only eight years ago by former president François Hollande.

The bill's main sponsor, Renaissance Party member Maud Bregeon, said the legislation would "enable France to achieve carbon neutrality" by increasing the share of low-carbon energy derived from nuclear sources. She added that it would also strengthen the country's energy independence as European countries struggle to cope with the war in Ukraine without Russian gas and oil.

In a report coinciding with the start of the National Assembly debate, Greenpeace said on Saturday that France's nuclear industry was "under Russian influence" because of its dependence on uranium imports from former Soviet bloc countries whose exports pass through Russia.

In 2022, "nearly half of France's natural uranium imports came from Kazakhstan and Uzbekistan", the environmental group said, with most of them arriving at the port of St Petersburg via the Russian nuclear company Rosatom, "which controls the transport of all nuclear-related materials transiting Russian soil". Indeed, Tashkent signed an agreement with Russia's Rosatom in 2017, but may end up looking for other solutions in case of collateral damage from Russia's war in Ukraine.

Investment cooperation between Uzbekistan and France is promising in many sectors of the economy, especially in areas where France has a leading position in the world, e.g. mechanical engineering, energy, chemical industry, including perfumery, pharmaceutical industry, agriculture, especially viticulture, production of building materials, as well as tourism and science.

Central Asia was an important source of uranium for the former Soviet Union. Uranium has been mined for over 50 years and uranium ore has also been imported from other countries for processing.

Uzbekistan is the world's fifth largest supplier of uranium with 3,500 tons of production, according to the World Nuclear Association. The country was a major source of Russian uranium until its independence in 1991. Joint ventures are active in the development of the ore in the country. In December 2019, a company called "Nurlikum Mining" was founded, 51 percent of which is owned by the French nuclear company Orano, and 49 percent by the Geological Committee of Uzbekistan. In November last year, immediately after the meeting of the presidents of the two countries, a tripartite agreement was signed between the State Committee on Geology and Mineral Resources of Uzbekistan, the Uzbek state enterprise "Navoiyuran" and the French company "Orano Mining" on the expansion of cooperation in the field of uranium production and processing.

This agreement would be the basis for an "exclusive strategic alliance" between the two countries in the field of uranium mining. The government of Uzbekistan plans to increase the volume of uranium production in the coming years in the context of changing global energy markets.

In summary, in recent years, trade and economic cooperation with France has grown and diversified, covering more and more sectors and directions, but despite this, it has enormous untapped potential.

France's vital trade links, raw material base and transport network lie along the Trans-Caspian International Transport Corridor. Perhaps it is time for France to take a closer look at the region situated in the East of the South Caucasus.