France admits Niger has 'legitimate' demands in uranium talks

France on Wednesday admitted that former colony Niger's demands for more revenues from uranium mining are "legitimate", as the two countries pursue tough negotiations.

Development Minister Pascal Canfin told the National Assembly that France and Niger had agreed to reach a deal by the end of February on the amount of royalties paid by state-owned French nuclear giant Areva on its mining operations there.

He said the new deal would allow Niger "to increase the amount of fiscal revenues that it has a right to".

"Niger's demands are considered legitimate by the government, unlike by the previous government," he said.

The two sides are negotiating after Areva's contract to operate mines in Niger -- the world's fourth-largest uranium producer -- expired at the end of last year.

Areva has operated the mines since the early 1970s, and pays royalties on extracted ore of just 5.5 percent under deals Niger signed with France in 1961 and 1968.

The government in Niamey wants to apply a 2006 mining law that ends tax breaks for foreign companies to Areva, which has thus far been exempt. If the 2006 law were applied, its tax rate would rise to 12 percent.

Taking a tough stand with Niger's former colonial ruler, Minister of Mines Oumarou Hamidou Tchiana has accused Areva of "taking advantage" of previous governments to "practise their greed".

Canfin said Paris wants to find a "new balance" in the deal that would be "compatible with the development of Niger", which is mired in poverty and ranks last on the United Nations' Human Development Index.

The stakes of the deal are critical for both Niger and France, where the state owns 80 percent of Areva and where nuclear power provides 75 percent of electricity.