Tag Archives: Cameco

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MZConsulting New Year’s Message 2017

By Milt Caplan
President
MZConsulting Inc.

Originally posted at http://mzconsultinginc.com/.

2016 was another tumultuous year for nuclear power. Decisions to close units in the USA early due to economic pressures in deregulated markets and the slow pace of restarting nuclear units in Japan continue to negatively impact the uranium market. However, the tide has now turned as the benefits to the environment and system reliability are being more broadly accepted with both New York and Illinois having taken decisions to keep marginal plants running.

Uranium producers continue to struggle due to low prices

The stock prices of Cameco in Canada, Energy Fuels and Ur-Energy in the US and Paladin in Namibia, along with uranium holder Uranium Participation are once again in negative territory in 2016. That is symptomatic of a current supply-anddemand imbalance. However, some Juniors such as Forsys, Mega and UEX, with highly prospective properties not in production, have done better in 2016. This is perhaps indicative that, while the immediate problem is falling uranium prices, the market recognized that new supply will be required in the longer term.

The spot price of uranium continued to fall throughout 2016 going as low as $18/lb in November before ending the year at $20.25/lb. Has the price finally hit bottom? Probably yes. The long-term price, only at around $30/lb, is finally in a place where even the low-cost producers are slowing production as they focus on cost cutting to remain viable. While more positive trends for the longer term continue, prices are likely to stay soft in the short to medium term until demand recovers.

Production in 2015 shows that of 19 producing countries, Kazakhstan (39%) is by far the largest uranium producer followed by Canada (22%) and Australia (9%). These three countries produce over two-thirds of the world’s uranium. Cameco’s McArthur River (12%) and Cigar Lake (7%) in Saskatchewan are the two largest uranium mines in the world, supplying some 19% of world production while eleven companies marketed 89% of the world’s uranium production with Cameco ranking second behind KazAtomProm.

Crisis creates clarity in the role of nuclear power

Economic pressures in dysfunctional US electricity markets as a result of very low gas prices and subsidized renewables, have put some 15 to 20 nuclear plants at risk of early closure. This has forced reluctant law makers to address the issue with many coming out in support of maintaining the nuclear fleet as an essential part of the mix based on nuclear’s low carbon footprint and its contribution to system reliability.

The result was an agreement in New York and in Illinois to keep struggling nuclear plants afloat. That being said, there is still more work to be done to solve the larger problem of markets that need reform. It was a pivotal year in the US, as the country’s first new nuclear plant in more than two decades, Watts Bar 2, came into service. Four more units are under construction, and NuScale has recently submitted the first application for design certification for an SMR. While support for nuclear is expected to continue, uncertainty remains as the new administration shows little interest in climate change and embraces fossil fuel development.

In Switzerland, the early closure for their nuclear plants was strongly rejected in a referendum while in Britain, there was a final commitment to the Hinkley Point C project with more new units to follow.

On the other hand, as another plant closed in Germany its carbon emissions continued to rise in 2016 as this plant was replaced with a combination of coal and gas. This was in spite of another 10% increase in new wind capacity and 2.5% of new solar capacity; and shows that trying to manage carbon while removing nuclear from the mix is extremely challenging.

Supply is finally responding to prices

One of the biggest issues facing the uranium market actually stems from the 2011 tsunami that resulted in the Fukushima reactor meltdown in Japan. That event caused Japan to shut all of its nuclear power plants and led Germany to accelerate its plan to shift away from the nuclear option. The swift shutdown of so many units pushed supply and demand way out of balance.

While it remains Japan’s intention to restart many of its shuttered nuclear facilities, progress continues to be very slow so that demand will be impacted for some time to come.

As a result, major producers like Cameco have been directing their efforts to cost-cutting and refocusing around its best mines. For example, the company reduced its capital spending projections for 2016 by around 10% and plans to cut operating costs further in 2017. Despite the downturn, it has continued to invest in its Cigar Lake mine because it’s relatively low cost to operate. The recent opening of that mine helped to cut Cameco’s cash costs of producing uranium by more than 20% through the first nine months of 2016.

Kazakhstan, the world’s largest producer, has been continuing to increase production year over year but now has announced it will cut production by 10% in 2017.

However, China will be entering the big leagues in uranium supply this year as the Husab mine in Namibia ramps up production. This elephant is expected to add about 15 million lbs to the market each year once it reaches full production. With mining costs above the current uranium prices and the world in oversupply, it will be interesting to see how China chooses to move forward.

Nuclear sector growth

In spite of all this apparent gloom and doom, the nuclear industry remains strong. 10 new units were completed in 2016, while three were closed. Of interest, only half of these completions were in China with the other half coming from Korea, India, Pakistan, Russia and the USA. With 60 reactors under construction world-wide; led by China, this is the largest nuclear new build construction in more than a quarter century. As China continues to meet their stated objective of 58GW by 2020, this period of weak uranium prices presents an opportunity to further build strong inventories for the future.

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Partnering for the Future

Northern Saskatchewan; remote and rugged, this part of the prairies is known for its pristine lakes, tall arching trees and outdoor adventures.

It is also home to the largest high-grade uranium deposits in the world.

Approximately five hours north of Saskatoon is where you will find the community of Pinehouse Lake, Saskatchewan. The Kineepik Metis village of almost 1,500 is nestled on the Churchill River system.pinehouse

For practically three decades, this community has had a close relationship with Cameco Corporation; the largest private employer in Canada of First Nations and Metis people.

“More or less our community can have a future. Because of our young populations we need to be more sustaining and more certain, and this is one of the things that industry has brought to us, a lot of hope,” states Mike Natomagnan, the mayor of Pinehouse Lake and a former Cameco worker.

For him, hope has translated into real change, including more involvement with the environment, and better educational opportunities for young people. Community dollars have been invested into education through scholarships and partnerships with local schools.

“We want our kids to have a better opportunity to see the world,” Natomagan states, “Push education on top of everything else. It makes for better outcomes.”

Those outcomes can already be seen in the halls of the local high school which boasts a high graduation rate including 37 people pursuing post-secondary studies. For Natomagan it’s a big deal.

The knowledge of elders to provide the community with a better understanding of where they have been and where their world is going through the promotion of culture and language is another key component to educational investment.

Thanks to their partnership with Cameco, Pinehouse Lake has been able to address some health challenges.  Concerned over the rates of diabetes in young people, they invested in a breakfast program and the construction of a community arena to help promote a healthy lifestyle.

He believes in long-term collaborations based on open dialogue and participation. Working closely with industry means more involvement with the environment including visiting the mine site, holding public meetings and providing reports on activities in the area.

Economics is critical to the future of Pinehouse Lake for Natomagan. The mayor sees investments today as the cornerstone of tomorrow.

“Collaborate with industry that wants to be there for a long time. Work with us,” he says. “I hope (Cameco) will be here for a long time. They have stepped up to the table for us.”

In early June, Cameco and First Nations and Metis leaders from across northern Saskatchewan will converge in Ottawa to “celebrate 25 years of partnerships between company and communities.”

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Preparing For the Unexpected

Fort McMurray. A city once synonymous with oil is now known for the worst forest fire in Alberta’s history. The massive blaze exploded thanks to hot, dry weather. It has scorched over 200,000 hectares of ground and counting. It will take months before the flames are finally extinguished, and many more before lives can be rebuilt.

Natural threats, like the forest fire in Fort McMurray, are reminders of the challenges that every industry faces and subsequently must address: preparing for severe events that can happen, often with little or no warning.

The nuclear industry is not without its own risks from Mother Nature.  In March 2011 one of the most powerful earthquakes on the planet opened up the sea floor and unleashed a wall of water on the Japanese coast.  The Fukushima Daiichi nuclear power plant was hit by an earthquake and a tsunami that were both much larger than its builders had contemplated.  The resulting accident led to a world-wide scrutiny of power reactors for their ability to resist extreme natural events.  The nuclear industry has since instituted what we call “beyond design” safety measures to prepare for events beyond the range used as a basis in the original design process.

FUKUSHIMADAMAGE

Being prepared for severe weather events requires an enormous undertaking by industry.  Different industries are accountable to different regulatory bodies, organizations that operate at an arm’s length from government and aim to ensure that best practices are followed.

Nuclear reactors at Canadian sites, and the facilities around them, have numerous, layered design features and operating procedures that rendered very, very low risk the possibility of an accident because of extreme weather – such as winter ice storms or high winds.  These features and procedures have worked well for the more than fifty years that the industry has generated electricity for Canadians.  In all this time, we have not had a radiation release that harmed people or the environment.

Should nature get the best of all these technological, engineering, construction and operational defences, we know how to respond quickly in response.  The Canadian Nuclear Safety Commission (CNSC)  requires all nuclear power plant operators to have a fire response team and the regulator mandates that “the licensee also supports provincial and local authorities in their response efforts.”

For example, Cameco Corporation’s emergency response program at its uranium processing facility in Port Hope, Ontario is comprehensive and includes approximately 60 highly trained employees, most of whom have specialized training in industrial firefighting and hazardous materials. As has been seen in Alberta, a coordinated response to a natural disaster is important. Cameco covers the cost of hazardous material training for all members of the Port Hope fire and emergency services department, which would support the efforts of Cameco’s emergency response team in the event of a natural disaster.

Post Fukushima, reactor operator Bruce Power, which boasts a team of 400 highly trained emergency personnel, worked with other industry experts to develop state of the art fire trucks which included doubling the water capability, night-scan lights and LED technology. In addition to the new fire trucks, the company also purchased portable back-up generators and invested in specific post-Fukushima training. Throughout the nuclear industry and supply chain, organizations realize the importance of investing to prepare for the unexpected.  That is the best and prudent way to minimizing the impacts that severe weather can have on people, the environment and industry.

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World’s Leading Uranium Source?

In less than 15 years, a country that borders China and Russia has grown to become the world’s leading producer of uranium. According to the World Nuclear Association, Kazakhstan provides 41 percent of the global supply. (Canada is the second-largest source, at 16 percent.)Uranium ore

Kazakhstan’s uranium production increased almost seven fold between 2004 and 2011 from just less than 4,000 tons in 2004 to close to 20,000 tons by 2011. Its uranium mines directly employ about 9,000 people (source: NEA).

Kazakhstan exports all its uranium production, because it doesn’t have any nuclear power plants. But that may soon change. In 2002 the government adopted a resolution to develop a national nuclear power strategy, including determining the feasibility and safety of reactors. The goal is to provide the country with high-tech energy to increase prosperity.

In July, Kazakhstan joined the World Trade Organization. That was a major accomplishment for President Nursultan Nazarbayev, who launched the WTO membership effort almost 20 years ago. We work (hard) to become a part of the global community,” he said as he signed Kazakhstan into the WTO.

Kazakhstan recently agreed to supply India with 5,000 tonnes of uranium over the next four years.

The economic potential of the mining industry hasn’t gone unnoticed by Canada. Cameco has partnered with the Kazakh government as part of a four hundred million dollar mining investment. Started seven years ago, the operations have provided financial and employment benefits for both countries, and improvements to the Kazakh mining industry’s environmental record.

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CNA and Members Among World Leaders at 2014 Nuclear Industry Summit

By Erin Polka
Communications Officer
Canadian Nuclear Association

Canadian Nuclear Association members will be among the world nuclear industry leaders participating at the third Nuclear Industry Summit in Amsterdam, the Netherlands, from March 23 to 25.

The summit is organized in conjunction with the Nuclear Security Summit in The Hague. Leaders from 58 countries will attend the security summit, including Prime Minister Stephen Harper and U.S. President Barack Obama.

The industry summit is a high-level event for global nuclear CEOs focused on the security aspects needed to ensure that the nuclear industry is seen by society as valuable, now and in the future.

Canada will be well represented at the industry summit with Bruce Power CEO Duncan Hawthorne chairing one of the summit’s working groups on security governance and Cameco president Tim Gitzel is a featured speaker.

Ken Ellis, a long-time Bruce Power executive and current World Association of Nuclear Operators managing director, will also address the summit.

CNA president Dr. John Barrett will be in attendance as an observer, along with AECL CEO Dr. Robert Walker, Candu Energy senior VP of engineering Dezi Yang and and Canadian Nuclear Partners president Pierre Tremblay.

The industry summit will focus on promoting a strong security culture throughout the global industry, cooperation in dealing with cyber security threats and continuing to reduce the use of highly-enriched uranium in research reactors and radiological isotope production.

The conference will have three working groups – Strengthening Security Governance, Dealing with Cyber Threats, and Managing Materials of Concern. The chairs of these groups, including Hawthorne, will report later to the Nuclear Security Summit with recommendations on how the industry can help further enhance nuclear security.

Industry participation in global nuclear security is important. Industry operates facilities such as nuclear power plants and is responsible for safety and security of nuclear or radiological sources at such facilities.

Canada is not only a major player in all aspects of the use of nuclear technology for peaceful purposes, but it is also a world leader in nuclear safety.

This year, the Washington-based Nuclear Threat Initiative ranked Canada second behind only Australia in securing its nuclear materials for peaceful purposes.

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Cameco Named One of Canada’s Best Diversity Employers for 2014

By Romeo St-Martin
Digital Media Officer
Canadian Nuclear Association

Congratulations to Cameco.

For the fifth successive year, Cameco has been selected by the Globe and Mail as one of Canada’s Best Diversity Employers for 2014.

The annual competition recognizes Canadian employers that have exceptional workplace diversity and inclusiveness programs.

“This award recognizes our long-standing track record in aboriginal and Métis employment,” said Tim Gitzel, Cameco’s president and CEO. “We are proud to be Canada’s leading industrial employer of aboriginal people and of the proactive approach we take to support career growth in this sector of our workforce.”

Here are some of the reasons why Cameco was recognized by the Globe:

  • Established a northern workforce strategy to focus on the recruitment of residents from northern Saskatchewan, of which a large percentage are Aboriginal – the strategy is managed by a dedicated team of employees who consult with Aboriginal leaders, local schools, community members and professionals on the creation of opportunities for residents as well as overall development of the northern community

Those of us in Canada’s nuclear industry already know it’s a great place to work, offering long-lasting, safe, well-trained and high-knowledge jobs to tens of thousands of Canadians. Cameco continues to set a great example that all Canadian businesses can admire and follow.