A bloody military coup is "potentially positive" for uranium prices, a note from Edward Sterck with BMO Capital Markets says.
"Tensions have been high" in the African country of Niger since its president, Mamadou Tandja, dissolved parliament to stay in office, he said. Mr. Tandja has since been kidnapped by soldiers with the Supreme Council for the Restoration of Democracy, after a pitched gun battle through the streets of capital city Niamey ending at the presidential palace.
"Whilst military coups are not new to Niger, a possible risk is that the country's new leaders might be tempted to interfere with uranium production or place extra demands on producers," Mr. Sterck said. "Market uncertainty may result in a boost to the spot price of uranium if nervous utilities move to increase inventories."
Most of the current production is managed by Areva, a French energy company that is in the process of investing 1-billion Euros into a third mine in Niger. The company's mines have survived the many previous coups and two rebellions in the country.