Cameco lays off hundreds of Sask. employees, extends site shutdowns
CEO says uranium prices have continued to slide over past 7 years
Uranium miner Cameco Corp. has permanently laid off hundreds of employees in Saskatchewan, with the company's CEO laying the blame on a market that has become progressively worse since the Fukushima Dachii nuclear disaster in 2011.
"The Japanese very quickly shut down 54 reactors, which was about 20 per cent of the world market. And so, that really had a huge effect," said Tim Gitzel, noting over the course of the past seven years, uranium prices have slid from $75 US per pound to its current price of about $23 US per pound.
Only recently, companies including Cameco have been cutting back production to deal with a surplus of uranium sitting on the market, he said.
About 550 total employees from the Key Lake and McArthur River uranium mine sites have been terminated and another 150 were laid off from the corporate head office.
The layoffs are a result of the company indefinitely extending production suspensions at its McArthur River and Key Lake operations, according to Cameco.
The company said last November that the closures were expected to last 10 months, but Gitzel said the uranium market has not improved and has only worsened in that time.
The closure in January of the McArthur River mine and Key Lake processing plant put 845 people temporarily out of work.
Cameco says the indefinite extension of the shutdown means it will permanently lay off about 550 employees, while 200 will remain on board for care and maintenance.
The company says it will also cut about 150 positions at its corporate office, including employees and vacancies, to further cut costs.
News of the job cuts comes as the company reported a net loss of $76 million for the second quarter, compared to a net loss of $2 million for the same period last year.
The company will now buy uranium to fulfil its contracts, with the goal of using some of the excess supply on the market, said Gitzel.
"It's just a very tough day for us, for the company, for the province," he said. "But we're hoping for brighter days ahead."
Challenges for natural resources
Saskatchewan's Minister of Energy and Resources Bronwyn Eyre sent out a statement indicating that the province's Rapid Response Team would reach out to Cameco to offer help to employees impacted by the decision.
"This announcement underscores the challenges our natural resource industries continue to face," she stated, pointing to current NAFTA discussions and a more recent U.S. decision to investigate uranium imports as other challenges.
With files from The Canadian Press