Japanese power company defends decision to end Cameco uranium contract
Remaining contract worth $1.3 billion over 11 years
A Japanese power company is not backing down from its decision to cancel a uranium contract with Cameco.
Last week, the Tokyo Electric Power Company (TEPCO) issued a contract termination notice to the Saskatchewan-based mining company. On Tuesday, TEPCO told Cameco it wouldn't be accepting a shipment of uranium scheduled to arrive Wednesday.
"We are aware that Cameco is showing their objection to our assertion of termination," said TEPCO in an email. "However, our notice complies with the agreement and we will make appropriate actions."
- Cameco threatening legal action after Japanese company cancels major uranium contract
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The company has been unable to operate its nuclear power generating plants for the past year and a half, blaming tough government regulations that arose from the Fukushima nuclear power plant meltdown in 2011. As a result, it's arguing the shutdown is a "force majeure" or unavoidable catastrophe that cancels the contract.
Now, Cameco is threatening legal action against the company, saying that it is illegally trying to get out of its agreement.
TEPCO has already received and paid for 2.2 million pounds of uranium since 2014. The contract termination would affect approximately 9.3 million pounds of uranium deliveries through 2028, worth roughly $1.3 billion.
Contracts with Japanese power utilities constitute roughly 11 per cent of its business.
Cameco said it has enough financial capacity to manage any loss of revenue in 2017 as a result of the dispute