Cameco encouraged as Trump ends fears of uranium import restrictions

Saskatoon-based uranium mining company Cameco is breathing a sigh of relief after U.S. President Donald Trump declined to put restrictions on uranium imports from other countries in a memorandum sent Friday.

"I wouldn't say it was a surprise, but we were certainly pleased," said Jeff Hryhoriw, director of government relations and communications with Cameco.

Uranium producers in Canada had been watching the U.S. closely for the past year as that country's Commerce Department started investigating whether restrictions on uranium imports were necessary to maintain national security.

The U.S. Secretary of Commerce Wilbur Ross had submitted a confidential report three months prior, the contents of which were found in a presidential memoranda, stating "that uranium is being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States."

The investigation started when two American uranium companies complained they couldn't compete fairly for a larger share of the U.S. uranium market because of state-owned, publicly-subsidized producers in foreign countries.

Cameco is a publicly traded company and the U.S. is its largest customer. Twenty-five per cent of Cameco's sales, by volume, went to the U.S. last year.

"This particular investigation certainly had some risk for us and we were very active in trying to provide our perspective that uranium supplies by Cameco, or Canada, to the United States has never been a national security threat," Hryhoriw said.

Foreign Affairs Minister Chrystia Freeland issued a news release on Monday responding to Trump's decision, echoing a statement from Cameco that Canadian uranium is no threat to the national security of the United States. 

"Canada is a stable and reliable supplier of uranium for American civilian nuclear power reactors. Our two countries need to work together to ensure we have reliable supplies of critical minerals, including uranium," Freeland said.

Cameco wants to be part of working group

Trump's memorandum also ordered the establishment of something called the "United States Nuclear Fuel Working Group" to address challenges in domestic uranium production in the States.

Cameco wants to be a part of that group.

Hryhoriw said the group has potential to move away from talks of tariffs or quotas toward tax incentives or subsidies to support the U.S. uranium industry, which would be good for Cameco.

"Cameco has been experiencing the same challenges — the current tough market — as the U.S. producers who petitioned for this investigation in the first place, so we certainly have some sympathy for the plight that they've expressed concern over," Hryhoriw said.

The working group will spend the next 90 days creating a report that's intended to look at the U.S's current state of domestic uranium production and possibly make recommendations to boost its production in that country.

Wider impact on Cameco's operations

Trump's announcement did not put an end to the indeterminate shutdowns for Key Lake and McArthur River that started in January of 2018. Cigar Lake is the only Canadian Cameco mine still in production.

The U.S. news is encouraging, but long-term supply contracts with acceptable rates of return are needed to even consider reopening those facilities and that's not the reality right now, Hryhoriw said.

The decision may bring some stability back to long-term contracts with U.S. utility providers at nuclear power plants that have been in 'wait and see' mode for the past year, he said.

"They were reluctant to lock into long-term contracts while this investigation was ongoing," Hryhoriw said.

"We're hopeful that we may see an increase in contracting activity with some of the uncertainty lifted in this particular case but it's too early to say."

Over the past year, Cameco has been joined by federal, provincial and embassy leaders in diplomatic missions to steer the U.S. away from restrictions on uranium imports, most recently on June 20 when Prime Minister Justin Trudeau met with Trump.