Tim Gitzel has been around uranium long enough to have seen his fair share of ups and downs, but the head of one of Canada’s major uranium companies now sees a bright future for both his company and the industry.
I’ve been in this game, the nuclear business, for over 40 years, and I don’t think I’ve ever seen the long-term fundamentals as good as they are today, like around the world,” said the chief executive of Saskatoon-based Cameco Corp., who has held that position for almost 13 years.
He pointed to recent commitments by more than 30 countries to triple their nuclear power generation capacity, which is something that has not been previously seen.
Currently, uranium is selling for US$80 per pound on the long-term market, a major reversal from the 2010s when the price was below US$20 per pound, which forced Cameco to shutter much of its mining operations.
Gitzel said the company now has contracts signed to sell around 200 million pounds of uranium, with some contracts stretching out to 2040. He is also bullish about future uranium prices.
“We think there might be even more pressure on pricing as more reactors are built and more countries get into nuclear,” he said.
With future demand for uranium looking positive, Gitzel said Cameco is looking to expand the life of its Cigar Lake facility in Saskatchewan by an additional five to six years so that additional supply can be mined. That mine currently produces around 18 million pounds of uranium per year.
The company’s McArthur River mine in Saskatchewan was set to produce around 19 million pounds of uranium in 2024 and has capacity for additional production.
“We can increase production if the market calls for it; we won’t do it on speculation,” he said.
One factor in favour of Western uranium producers, according to CIBC Capital Markets, was Russia’s mid-November announcement of curbs on enriched uranium exports to the United States, which was a response to the U.S. putting restrictions on imports of Russian enriched uranium products.
But there are risks, CIBC said, such as an unexpected slowdown in global economic growth and in China in particular, possible nuclear events, potential delays in Japanese reactor restarts and lower-than-expected demand from French and U.S. reactors.
Another wild card could come into play if the federal government implements export taxes on uranium, as well as other commodities, in response to incoming United States president Donald Trump’s threats to place 25 per cent tariffs on all products from Canada. Canadian uranium is the biggest foreign source of fuel for U.S. nuclear power plants.
Export taxes “are the wrong approach and Saskatchewan will vehemently oppose the federal government imposing export taxes on our potash, uranium or oil,” Saskatchewan Premier Scott Moe told Bloomberg.
But Gitzel doesn’t seem worried that the market will return to the 2010s when Cameco’s mines were in care and maintenance.
There was a side benefit back then to the slowdown, he said, since work was done to automate certain processes. One of these major changes was putting in place technologies that allow drums of uranium to be sealed by machines instead of by workers. He said this is one area where there are many developments ongoing.
“We’re constantly looking at that because it’s evolving so quickly, the use of data and big data and artificial intelligence and robotics,” he said.
Along with its mining operations, Cameco is as optimistic about the potential growth for Westinghouse Electric Co. LLC, a nuclear reactor manufacturer that Cameco holds a 49 per cent share of.
Cameco, in its third-quarter report, said it was expecting Westinghouse’s business to grow by six per cent to 10 per cent over the next five years. Gitzel said he is hoping to see this number climb, but added Cameco is being conservative with its estimate.
He said Westinghouse has fit into the fold nicely for Cameco.
“We go right from exploration and the mining side and making fuel right up to where now we can provide reactor technology for countries and companies,” he said.
Westinghouse is in talks with countries around the world about the reactors it offers, and it offers other services, such as servicing reactors along with fuel fabrication, that are growing in demand as some jurisdictions look to bring nuclear power back online.
“There’s good demand for all the products,” Gitzel said.
Another major development for the nuclear industry is Canada moving closer to having a permanent site where nuclear waste can be stored for the long term. In November, it was announced that building a permanent site in northwestern Ontario to store nuclear waste created was moving forward.
Gitzel said this development is a good one for the nuclear industry since the site will provide a safe location to store spent nuclear fuel for hundreds of years. He credited multiple levels of government for the work that has been done over many years to help develop good processes and methods for storing waste.
He also gave credit to the leadership at the Nuclear Waste Management Organization (NWMO) for the work it’s done to move towards getting a permanent facility built. He added Canada is not alone in working to develop a permanent storage site for nuclear waste.
“We join countries like Sweden and Finland, and France is working on theirs, that are moving ahead (with) pretty much the same technology,” he said.
Gitzel said having a waste storage facility is also important because it stops the issue from continuing to be kicked down the road. Currently, nuclear waste is stored at above-ground facilities that tend to be near nuclear facilities.
He said the nuclear industry is in a unique situation compared with other power generators since most other fuels simply burn off their waste and emit it into the atmosphere.
Despite the absence of a permanent storage site in Canada, Gitzel believes the industry has been responsible when it comes to managing its waste.
“We could show where every spoonful of waste is from every reactor that’s produced electricity in Canada, probably around the world; we manage it that responsibly,” he said.
Gitzel said that along with a long-term storage site, there is also work being done to recycle spent reactor fuel to create more energy, which could be a possible solution going forward for dealing with some waste.
“The fuel that comes out of a nuclear reactor still has a lot of energy left in it,” he said.
Source: Saskatoon Star-Phoenix
