Saskatoon

Uranium miner Cameco 'cautiously optimistic' about future as losses continue to mount

Cameco admits it's a difficult time to be in the uranium-mining business, but it hopes conditions will improve.

Annual report says Saskatoon-based company lost $205M in 2017; Cameco blames global oversupply

Miners walk through an underground shaft at Cameco's Cigar Lake mine in northern Saskatchewan. The company reported a net loss of $205 million in 2017 in its latest annual report. (CBC)

Cameco admits it's a difficult time to be in the uranium-mining business, but the Saskatoon-based company hopes conditions will improve.

In the company's latest annual report, Cameco said its net losses amounted to $205 million in 2017. In 2016, the company lost $62 million.

The report said the global market is currently flooded with uranium, driving down prices. At the same time, a number of Japanese reactors continue to be shut down after the Fukushima Daiichi nuclear disaster in 2011, contributing to weak global demand.

"We are cautious because we continue to face difficult market conditions and have seen a reduction in global demand expectations," read the report.

"[However,] additional uranium supply will be needed to support the reactor construction programs currently underway but not yet consuming uranium."

Cameco said Japan has already restarted five of its reactors, with another four expected to restart this year. As well, the company said there are 57 reactors under construction around the world, with many of them expected to come online in the next three years.

Until the market turns around, Cameco said it's focused on slowing down production. In January, it temporarily shut down production at its McArthur River mine and Key Lake mill, putting 845 people out of work for an estimated 10 month period.

In 2016, the company also suspended production at its Rabbit Lake mine.

"While we regret the negative impact that these carefully deliberated decisions have on affected employees and other stakeholders, these actions are deemed necessary for the long-term health of the company," read the report.

The company is also waiting for the results of two major legal actions.

A dispute with the Canadian Revenue Agency over a potential $2.2-billion tax bill wrapped up in court in September. A ruling is expected within the next year.

As well, Cameco is seeking $1.3 billion from the Japanese power company TEPCO after the Japanese company told Cameco it would be withdrawing from a uranium-sale agreement.

That case is expected to be heard by arbitrators in 2019.

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