Cameco predicts China boost as wait to re-open mines continues

By Glenn Hicks
September 26, 2018 - 5:00pm

While it will come as little consolation to the hundreds of people laid off in the North, the CEO of Cameco has returned from China encouraged about the long term future of the sector and the two currently dormant mines.

Tim Gitzel was part of Premier Scott Moe’s first trade mission there over the last week and said having a continuing client like China, with such an aggressive growth strategy for nuclear power, was crucial to operations in McArthur and Key Lake.

“Without China as a good customer it would make [the current situation] even more difficult,” Gitzel told paNOW. “Today, China has 57 reactors either in operation or under construction, and they told the premier and us that they plan to have thirty more under construction by 2020; that’s phenomenal growth.”

That growth Gitzel said, was vital for the long term, because China would be wanting a secure supply of high grade uranium some 40 years into the future as they expand their clean energy production.

Gitzel applauded Moe for spending nearly an entire day with him as they met with the China Atomic Energy Authority and two of Cameco’s large customers for the past eight years, China National Nuclear Corporation and China General Nuclear Power Group.

“Premier Moe is a great salesman for Saskatchewan and for the uranium industry and he gave our customers the assurance that if there was anything he could do to make trade easier he was there to support that,” Gitzel said.

Although China’s nuclear energy growth spurt in the coming years could see them rival the United States as Cameco’s biggest customer, Gitzel suggested in the immediate term there was nothing pointing towards a return to operations at their closed McArthur and Key Lake facilities.

“The market is still tough and we’re looking forward to the day we can announce the re-start, [but] it’s not yet,” he said. “This is a longer term game and we have already said we need a significant improvement in the market so we can go to countries like China, the US, India and others, and sign long term contracts and have the confidence to re-start McArthur/Key Lake.”

The long term contract price for uranium is currently $31.50 per pound, which is slightly better than the $29 being offered in late May but still a way off the $44 being fetched in early 2016. Uranium’s all-time high long term contact price was $95 in early 2008.

Despite the current doldrums, Gitzel remained adamant their operation in the North would come back on line.

“It will re-start, I’ve been in the business for over 30 years and it will restart,” he said. “It’s the largest high-grade mine in the world …and we hope things improve sooner than later.”


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