Canada’s Cameco is soliciting bids from uranium producers and trading companies to supply 500,000 lb of uranium between the end of this year through March 21, 2019, with a requirement that the material not be of Russian origin, market sources said last Thursday.
The solicitation, made Tuesday, sets August 31 as the deadline for potential suppliers to submit their bids to Cameco, sources said. Cameco specified that the U3O8 delivery, to fulfill its contracts with utilities, be made at any of three conversion facilities: Honeywell’s Metropolis in Illinois, Cameco’s Blind River in Ontario, or Orano’s Comhurex II in France, sources said.
“Cameco issued a request for proposal (RFP) for the supply of up to 500,000 lbs. of U3O8 — for delivery in late 2018 or early 2019,” Cameco spokeswoman Carey Hyndman said in an email Thursday. Hyndman declined to comment on the RFP’s delivery destination specification.
She said that Cameco stipulated it would not buy Russian-origin material due to the US’s Russian Suspension Agreement that sets limits on the volume of Russian uranium or enriched product imports through 2020. “By specifying non-Russian origin, it maximizes our flexibility in terms of what markets we might ultimately choose to deliver the product into,” she said.
Cameco announced July 25 it would keep its McArthur River conventional uranium mine shut “for an indeterminate period” due to persistent low uranium prices.
Cameco executives said July 26 at a briefing for financial analysts that the company would have to buy as much as 15 million lb of uranium through the end of 2019 in order to meet its contractual obligations.
Two uranium company producer executives, who requested anonymity citing confidentiality provisions in the Cameco solicitation, confirmed it specified the 500,000 lb were to be delivered to one of the three conversion facilities between year’s end and March 21.
An industry source, who requested anonymity, also citing the solicitation’s confidentiality provision, said that US trade laws’ complex provisions for determining a product’s country of origin could mean that Russian-origin U3O8 converted and enriched in Canada or France and shipped to the US for fuel fabrication, could still “carry the Russian flag” and be subject to the suspension agreement limitations.
In addition, he said “there could be new restrictions from the Trump White House on the import of Russian uranium, so it’s not worth the risk for Cameco to buy Russian material for delivery to US utilities.”
Source: S&P Global Platts