Canada’s Cameco Corp, the world’s second-biggest uranium producer, is exploring the sale of its U.S. production facilities, its chief executive said on Monday, as a six-year slump in the industry drags on.
Cameco, which has been cutting costs and curbing production, is in the early stages of evaluating the sale of its mines in Wyoming and Nebraska, but also wants clarity on U.S. President Donald Trump’s plans for nuclear power, Chief Executive Tim Gitzel said in a telephone interview.
“We are in the process of looking at divesting those assets. We’re not very far into it, so I can’t say too much, but it’s something we’re looking at,” he said from the city of Saskatoon in Saskatchewan province, where Cameco is based.
The earnings of uranium producers have been hurt by low prices amid surplus supplies, tracing back to the 2011 Fukushima tsunami that led to the shutting down of all of Japan’s nuclear reactors. A few of those reactors have since come back online.
Cameco shares were down slightly in Toronto at $14.52, after reaching the day’s highs minutes after Reuters reported on the possible sale.
Cameco’s U.S. mines are able to annually produce 1 million to 2 million pounds of uranium, used to make fuel for nuclear reactors. Those mines – while much smaller than Cameco’s mines in northern Canada which are among the world’s biggest – are seen as an important foothold in the United States, a big uranium consumer with little domestic production.
Canada is the second-biggest uranium producer, after Kazakhstan.
The U.S. mines use the in-situ technique of removing ore by injecting a chemical solution into wells, while leaving rock in place. Gitzel declined to place a value on the mines.
As it ponders selling the mines, Cameco is also seeking clarity on Trump’s plans for nuclear power, and especially the views of new Energy Secretary Rick Perry, Gitzel said.
He said he was closely watching whether the United States follows through with a border tax on imported commodities, which could make U.S.-based production more valuable.
© Thomson Reuters 2017