The President and CEO of Canadian uranium company Cameco, Tim Gitzel, stated that the demand for nuclear power is driving the “best fundamentals ever seen” for the nuclear fuel market. The geopolitical events of 2022 and the ongoing focus on climate change have created favourable conditions for the nuclear power industry. Gitzel said that the Russian invasion of Ukraine a year ago had put the emphasis on the role nuclear power plays in providing secure and affordable energy. The global nuclear industry relies on Russian supplies for about 14% of uranium concentrates, 27% conversion, and 39% enrichment, highlighting the security of supply risk associated with the growing supply gap and shrinking secondary supplies.
Cameco has faced challenges in its investment in Inkai, as the company was impacted by the 20% supply reduction enacted by Kazatomprom across all uranium mines in Kazakhstan. The delivery of Cameco’s share of the 2022 production from the Inkai joint venture was delayed due to challenges in transporting uranium via an alternate route. The first shipment arrived at a Canadian port in late December and a second shipment is currently in transit.
Overall Cameco has had success in capturing the improving market fundamentals, signing a record number of contracts. The company contracted 80 million pounds of uranium and 17 million kgU of conversion services, of which 58 million pounds have been finalized under contracts and the remaining 22 million pounds have been accepted with key commercial terms. To meet its growing commitments, Cameco has started to return to its tier-one run rate and has brought its McArthur River/Key Lake operation back into production after five years of care and maintenance.