The Athabasca Basin hosts the world’s richest high grade uranium deposits. Saskatchewan produces 30% of the world’s uranium, and one main player in this Canadian mining success story is Cameco. The company was formed in 1988, and for over a quarter century, the company has been safely and reliably producing uranium and nuclear fuel products. Cameco currently has three active mines in northern Saskatchewan: Rabbit Lake, McArthur River and Cigar Lake.
Last year, Cameco successfully commenced production at their new Cigar Lake mine in northern Saskatchewan. This year, their main focus is to safely ramp up production at the mine. They expect to produce 6 to 8 million pounds in 2015, which would make Cigar Lake the third largest mine in the world by production. By 2018, Cameco expect’s to produce 18 million pounds(100% basis) of uranium concentrate annually. The ore mined at Cigar Lake is transported by truck to the Mclean Lake Mill operated by Areva Resource Canada Inc, where it is processed to Unranium concentrate. Mclean Lake Mill is located approximately 70 kilometres northeast of the mine site. Mining at Cigar Lake began in March 2014 and the first Uranium concentrate was packaged at Mclean Lake in October 2014.
The company has developed strong ties with aboriginal people, with an emphasis on partnerships, Metis Sean Wiilly has spent a career in mining and is very sensitive to Aboriginal relations stated that “ Our goal is to develop and maintain long-term relationships between First Nations and Metis communities near where we operate. We have signed collaboration agreements with the Meits community of Pinerhouse (2012) and the English River First Nation (2013). We also have a participation agreement with the community of Southend (2014) and an impact management agreement with the Dene communities of the Athabasca Basin. We expect that agreements will be how we share the benefits of uranium mining into the future.”
In 2014, Cameco employed 1,250 aboriginal people at their four northern Saskatchewan work sites (660 employees and 590 contractors), which represents approximately 45% of the northern workforce. This makes Cameco the largest industrial employer of aboriginal people in Canada.· Their relationships with First Nations and Metis communities in northern Saskatchewan span over 25 years and involve a number of initiatives. Last year Cameco spent $333 million in services provided by northern Saskatchewan vendors. Most of the vendors are aboriginal owned businesses and organizations. The agreements signed with Pinehouse and English River are worth about $800 Million and strenghtens the longstanding relationship with the two communities and better define the benefits flowing through employment, business development and community investment.
What does the future hold for Cameco? In the short to medium term, they expect to see continued market uncertainty as there is excess material currently available, primarily due to the idle reactors in Japan. Once these reactors begin to come back on line, they expect to see a return to long-term contracting by utilities and an improvement in the price of uranium. Over the long term, demand for uranium is increasing (by about 4% annually), driven by new reactor growth in countries like China, India, Russia and South Korea. Cameco is well positioned to meet the increasing global uranium demand and can bring on new production when market conditions improve. The long-term fundamentals of the mining industry remain strong and Cameco are optimistic about the future growth of their company and the urianiu mining industry. Today in China, there are 26 new reactors under construction with plans to build more than 100 more over the next two decades. Additional reactors will generate an increased demand for uranium.
The relationship between Cameco and their Aboriginal partners will continue, Marie Black from the English River First Nations commenting on the agreement signed with Cameco. “It’s a business deal that we’ve been working on for a number of years in a effort to collaborate more with industry. We believe we are setting a precedent in our work with other industries for the future. We are moving forward.” t