Cameco To Pursue ‘All Legal Right and Remedies’ Over Tepco Uranium Cancellation

1 Feb (NucNet): Canada-based uranium producer Cameco said on 1 February 2017 that it will not accept a termination notice for a uranium supply contract from utility Tokyo Electric Power Company (Tepco). Cameco said in a statement it sees no basis for terminating the contract, considers Tepco to be in default, and will pursue “all its legal rights and remedies”. According to Cameco, Tepco confirmed on 31 January 2017 it would not accept a uranium delivery scheduled for 1 February 2017 and would not withdraw the contract termination notice it provided to Cameco on 24 January 2017. Tepco alleges that an event of “force majeure” has occurred because it has been unable to operate its nuclear generating plants for 18 consecutive months due to government regulations arising from the Fukushima-Daiichi nuclear accident in March 2011. Tepco owns and operates the Fukushima-Daiichi station along with Fukushima-Daini and Kashiwazaki Kariwa. None of the 17 reactors at any of the three facilities are operating with the six Fukushima-Daiichi units shut down permanently. Tim Gitzel, president and chief executive officer of Cameco, said that for the past six years Cameco has worked “in good faith” with Tepco to restructure this contract and would continue to do so if there was any basis for a commercial resolution. “During the past week we tried to engage Tepco to obtain clarification given conflicting information we had received previously from them and only received confirmation of their intent to terminate the contract yesterday.” Under the contract, Tepco has already received and paid for 2.2 million pounds of uranium since 2014. The termination would affect approximately 9.3 million pounds of uranium deliveries until 2028, worth approximately CAD $1.3bn (€920m, $994m) in revenue to Cameco, including about CAD $126m in 2017, 2018 and 2019 based on 855,000 pounds of deliveries in each of those years. In 2017, Cameco’s consolidated revenue, including the Tepco revenue, is expected to range between CAD $2.1bn to CAD $2.2bn. Cameco said it has sufficient financial capacity to manage any loss of revenue in 2017 as a result of the dispute.