Cameco posts $53M in year-end losses, eyes low-carbon recovery

·2 min read

Canada's largest uranium producer is eyeing U.S. policy-makers' ambitious green recovery plans to bounce back from $53 million in year-end losses.

Cameco Corp. CEO Tim Gitzel said he believes global moves like the U.S. rejoining the Paris climate agreement and maintaining its fleet of nuclear power plants could partly drive a bump in demand that may eventually reopen operations like its McArthur River facility.

"People are having another look now, ... saying nuclear has to be a part of our portfolio, and that plays very well for Cameco," Gitzel said.

Despite its year-end losses resulting from closed facilities, Cameco posted $80 million in fourth-quarter earnings on Wednesday. It attributed those gains to cheaper production at its Cigar Lake facility after its first COVID-19 closure.

The company was forced to close Cigar Lake a second time in December, but continues to pay its employees. It's incurring $8 million to $10 million per month in care and maintenance costs as it does so. As of Dec. 31, it has $943 million in cash and short-term investments, $1 billion in long-term debt, and $1 billion in credit, a Wednesday news release said.

The last 10 years have been "tough waters" for the industry, Gitzel said.

Cameco idled some of its operations to meet falling demand, but Gitzel said he believes it may have "overshot" and that the "world (is) calling for uranium and we don't have it." Any new mine in Saskatchewan is likely an eight- to nine-year process, which makes it hard to react quickly to surges in demand, he said.

Given enough growth, one of Gitzel's first orders of business is opening operations like McArthur River, which Cameco put into indefinite care and maintenance in 2018. Reopening would mean hundreds of staff positions, he said.

"We'll bring back the ones we put into care and maintenance first, and then we'll look at new investments."

Countries pushing to reduce their emissions by using nuclear energy may help demand, said University of Saskatchewan economics professor Joel Bruneau.

If policy trends toward "net zero carbon emissions, then the jobs and the future of investment in places like northern Saskatchewan will be really strong," he said.

That's tempered in the short term with temporary shutdowns of mines as result of COVID-19. Other uncertainties, like a nuclear accident, could mean "bets are off," he said.

While that may mean the future of northern Saskatchewan uranium mining isn't necessarily "glowing bright," according to Bruneau, the industry is poised for positive future developments, with few large risks.

"If you think you have a future mining uranium in northern Saskatchewan, there's no reason to think that's changed."

Nick Pearce, Local Journalism Initiative Reporter, The StarPhoenix