09.11.2017_No224 / News in Brief

Cameco Blames Low Uranium Prices As It Suspends Production At McArthur River And Key Lake

Uranium & Fuel

9 Nov (NucNet): Canada-based uranium company Cameco announced on 8 November 2017 that because of continued low uranium prices, it is temporarily suspending production from the McArthur River mining and Key Lake milling operations in northern Saskatchewan by the end of January 2018.

Cameco’s McArthur River mine in northern Saskatchewan. Photo courtesy Cameco.

Cameco said in a statement that as a result of the suspension, the workforce at the operations will be reduced temporarily by about 845 workers. About 210 workers will be retained to maintain the facilities in safe shutdown.

The suspension and temporary layoff is expected to last 10 months.

Tim Gitzel, Cameco’s president and chief executive officer, blamed the continued state of oversupply in the uranium market and no expectation of change on the immediate horizon.

He said it does not make economic sense for Cameco to continue producing at McArthur River and Key Lake when it is holding a large inventory.

Cameco plans to meet its commitments to customers from inventory and other supply sources during the suspension.

Uranium prices have fallen by more than 70% since the Fukushima-Daiichi accident in March 2011 and remain at unsustainably low levels of around US$20/lb, Cameco said.

Cameco has been partially sheltered from the full impact of weak prices by its portfolio of long-term contracts, but those contracts are running out and “it is necessary to position the company today to generate cash flow if prices do not improve”.

To decrease costs, Cameco had already suspended production at its Rabbit Lake operation, stopped development and curtailed production at its US operations and reduced the workforce across all its sites including head office.

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David Dalton

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