Cameco CEO stays confident in difficult uranium market

Image: Cameco Australia

Cameco chief executive Tim Gitzel has reiterated the company’s growing optimism for the uranium market amid a temporary suspension of its Western Australia projects.

Despite increasing uranium demand and decreasing supply, the market is sending inappropriate signals by leaving prices that are unsustainable, according to Gitzel.

“Today, the market is failing to send the appropriate signals,” he said in a quarterly report.

“Current prices are putting supply availability at risk. This is not sustainable. The longer the transition takes, the greater the likelihood that the uranium price will go beyond what is required to incent tier-one production to return to the market.

“We expect this will provide the opportunity for us to capture additional value in our contract portfolio and support the restart of our tier-one assets.”

Cameco stated in August last year that any decisions to move ahead with the projects would depend upon market conditions.

The Yeelirrie project in Western Australia remained on a standstill despite receiving environmental approval from the Australian Department of Environment and Energy last year.

Under these circumstances, Cameco increased its long-term contract portfolio by 36 million pounds to sell over 130 million pounds of triuranium octoxide last year.

The company plans to purchase between 20 million and 22 million pounds of uranium this year, the majority of which could be drawn from the spot market.

Cameco also expects its delivery to be concentrated in the last three quarters of 2020.

“We have more prospective long-term business in the contract pipeline than we have seen since 2011,” Gitzel said.

“We have a vision to ‘energise a clean air world’, which is clearly aligned with the world’s growing demand for energy, while helping to avoid some of the worst consequences of climate change.

“We will continue to be disciplined and make the decisions necessary to keep the company strong and viable for the long term.”

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