DAKAR - The US government has approved up to $414-million in financing for a uranium project in Niger, according to the project's developer, in what sources described as a win for Washington two years after the West African nation expelled all US forces.

The US Development Finance Corp approved the debt facility for Canadian miner Global Atomic's Dasa project, which the company describes as the highest-grade uranium deposit in Africa, according to a company statement on Wednesday.

The investment could bolster US access to a strategic uranium supply at a time when Niger, the world's seventh-largest uranium producer, is locked in a dispute with French state-backed miner Orano, which long dominated the country's uranium sector.

The financing is being viewed by people familiar with the matter as a diplomatic and commercial breakthrough for Washington, whose relations with Niger deteriorated after the military government that seized power in a 2023 coup ordered US forces to leave in 2024. Niamey's new leaders have relied on Russian paramilitaries for security instead of the West.

Sources briefed on the effort said the US ambassador had urged Washington to rebuild ties with Niamey and back the project after the Trump administration took office with a renewed emphasis on deal-making in Africa.

The project was seen as an opportunity to secure access to a strategic energy resource that might otherwise fall into the orbit of rival powers, they said.

One source familiar with discussions involving Global Atomic and the DFC said a breakthrough came this summer when CE Stephen Roman travelled to Washington to resolve remaining issues holding up approval.

The project could also provide a rare bright spot in US-Canada relations, which have come under strain amid a trade war between the neighbours. 

Niger's government did not respond to a request for comment.

SECURITY AND LOGISTICAL CHALLENGES
Despite the financing commitment, the project faces significant security and political risks.

Jihadist attacks have repeatedly targeted Niger's government and security forces over the past year. Last month, mutinous soldiers attacked a key military airbase and the presidency.

Global Atomic has been exploring alternative routes to export uranium from the landlocked country as transport corridors to the coast have become increasingly risky, a source briefed on discussions said.    

One idea has been to invest in a route north through Algeria and across the Sahara Desert.

Algeria sent aircraft to Niger this summer to help the government respond to the latest coup attempt, underscoring improving ties between the neighbouring countries.

Uranium was added to the US critical minerals list last year, prompting renewed interest in Niger's reserves.

Those reserves include uranium stockpiles caught up in a dispute between Niger's government and Orano, which has launched international arbitration proceedings after losing control of key mining assets in the country.