Saskatoon

Cameco has cut half its Sask. workforce since Fukushima meltdown

Cigar Lake is now Cameco's only operating mine. Following the 2011 Fukushima nuclear disaster, the company cut production, and cut half its staff at its northern mines and head office.

CEO says uranium prices 'not even close to the levels needed' to reopen northern mines

Media walk the underground mine during a Cameco media tour of the uranium mine in Cigar Lake, Sask., Wednesday, September 23, 2015. (Liam Richards/Canadian Press)

Eight years ago, Cameco employed more than 2,100 people in Saskatchewan.

Then, on March 11, 2011, an earthquake measuring 9.0 on the Richter scale hit Japan, triggering a tsunami and causing catastrophic nuclear meltdowns at its Fukushima Daiichi power plants.

The earthquake and tsunami together resulted in almost 16,000 deaths, injured 6,000 people, and left 2,500 more missing. More than 470,000 people were ordered to leave their homes.

The Fukushima disaster soured the world's appetite for nuclear energy and sent uranium prices plummeting. This led the world's biggest uranium company to close northern Saskatchewan mines at Rabbit Lake, McArthur River and Key Lake.

In the years since, it has also left 810 workers from those mines and 219 Cameco head office employees in Saskatoon jobless.

This summer, 86 Cameco employees in Beauval lost their jobs, along with additional contract workers who used to provide security or catering services at northern mines.

'It's devastating,' said Nick Daigneault, the mayor of Beauval, where 86 Cameco employees have lost their jobs. 'It's gotten to the point where we're losing long-time citizens from our community.' (Supplied by Nick Daigneault)

Beauval's mayor, Nick Daigneault, called the cuts "devastating" for the northern village, which has a population of around 900 people.

"We lost a nurse because of it," said Daigneault.

He said entire families are now leaving for oil or potash jobs elsewhere, while other laid-off employees return to commercial fishing.

"I think the reality is slowly going to creep up on us here once the severance money dwindles," he said.

Daigneault called the cuts "a wake-up call" for northwestern communities.

He said leaders must now find ways to promote tourism and other employment less reliant on commodity booms and less vulnerable to swings.

Ron Woytowich, mayor of La Ronge, said well over a hundred homes are now for sale in his community after last summer's closures at McArthur River and Key Lake.

'The whole community suffers,' said Ron Woytowich, the mayor of La Ronge. (Olivia Stefanovich/CBC)

"They can get a comparable job in another mine," said Woytowich. "But they can't get it here."

He said other families are cutting back expenses, pulling their children out of hockey and other activities.

"That effect is noticed in the community big time," said Woytowich.

Prices 'not even close to the levels needed': CEO 

"We've been making some extremely difficult decisions," said Tim Gitzel, Cameco's chief executive officer.

He said his company has now taken 25 million pounds per year out of production. He said over the long term, leaving uranium in the ground makes more sense than selling it at low prices.

'We're taking carefully considered and deliberate actions,' Cameco CEO Tim Gitzel told a mining and metals conference this week in Florida. 'We've also been restructuring our organization to be as efficient as possible.' (Submitted by Cameco)

"This is capacity that can come back online relatively quickly with the right market signals," Gitzel said. "Unfortunately today's prices are still nowhere near, not even close to the levels needed."

Workers 'disappointed and upset'

Most people who lost their jobs at McArthur River and Key Lake are now looking elsewhere for work, said Darrin Kruger, a United Steelworkers staff representative.

"We're hopeful someday it'll fire up again but there's a lot of uncertainty out there," said Kruger.

Cameco remains a good employer. We just don't appreciate or like what's happened.- Darrin Kruger, United Steelworkers

He said 90 per cent of the United Steelworkers members opted to take severance payments, rather than remain on the company's recall list. 

"The workers are disappointed and upset with what's happened, but it hasn't soured the relationship," said Kruger. "Cameco remains a good employer. We just don't appreciate or like what's happened."

'Tentative market' slowing recovery

On Tuesday, Gitzel told a mining conference in Florida that even after paying severance to the employees laid off, Cameco still has a billion dollars in cash on its balance sheet.

He cited a few bright spots for the company, including its "unequivocal win" in a tax-dodging case with the Canada Revenue Agency and its request for $700 million US from an international arbitrator after Japan's Tokyo Electric Power refused in 2017 to continue accepting deliveries.

But Cameco may also lose its ability to sell Saskatchewan uranium into the United States, as American trade officials assess whether buying foreign uranium constitutes a threat to national security.

"The U.S. market is just frozen," Gitzel said.

Cameco sells 30 per cent of its uranium to utilities in the United States.

"We find ourselves in a tentative market lacking an adequate level of acceptable long term contracting opportunities," said Gitzel. "Nobody really knows what to do at the moment."

Cameco said it still has 622 employees working in northern Saskatchewan, with the majority at Cigar Lake and the rest maintaining idled mines.

The company said resuming operations at the three idled sites would likely take months, depending on the length of this shutdown.

Gitzel also told investors he's concerned about this spring's expiry date for a contract with unionized mill workers at the McClean Lake mill, 80 kilometres from Cigar Lake.

AREVA’s McClean Lake tailings management facility in northern Saskatchewan is one of three sites at the province with where uranium waste is still being deposited in tailings ponds. (Canadian Nuclear Safety Commission)

The mill is run as a joint venture with Orano, formerly Areva Resources, and has processed uranium ore from Cigar Lake since 2014.

Orano told CBC it currently has 318 employees at McClean Lake and 139 people working at its Saskatoon offices.

Community leaders say they've been told by Cameco executives not to count on any mines re-opening until at least 2021.

"Hopefully our community will rebound and hopefully the nuclear industry will rebound," said La Ronge mayor Woytowich. "It's a big thing."

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