TORONTO (miningweekly.com) – The McClean Lake mill, operated by Areva Resources Canada, in Saskatchewan, has started processing uranium ore from Canadian mining major Cameco’s C$2.6-billion Cigar Lake mine, which has been operating on and off since March, Areva said in a statement on Wednesday.

Areva’s mill has been on care and maintenance since 2010, undergoing modifications to process high-grade uranium ore without dilution.

It is expected to produce up to one-million pounds of uranium this year.

Uranium prices have declined more than 31% over the past three years amid a global supply glut. Uranium miners had been struggling since Japan's Fukushima Daiichi nuclear disaster hit in March 2011, which prompted all nuclear reactors to be shut down in Japan and created significant backlash for global uranium markets amid public concern about the safety of using nuclear-derived power.

The McClean Lake mill was expected to process 18-million pounds of uranium a year from 2018, once the Cigar Lake mine had reached full capacity.

These two operations combined were expected to become the world’s second-largest uranium production centre. Cigar Lake ore is transported by truck to the mill, 70 km north-east of the mine site for processing.

Cameco’s Cigar Lake project had suffered several setbacks in developing the mine over the years, as frequent flooding and problems with freezing the earth around the underground passages delayed production.

The Cigar Lake deposit occurs at depths ranging between 410 m and 450 m below the surface where water-saturated Athabasca sandstone meets the underlying basement rocks. Owing to geological conditions, it is necessary to freeze the deposit and surrounding rock to improve the ground stability and prevent groundwater inflows to the mine.

Mining was suspended in July to allow the orebody to freeze more thoroughly. Mining resumed in the first week of September and ore deliveries to the mill were ongoing. Cameco said that, to date, it had delivered about 1 400 t of ore to the mill.

The McClean Lake mill is 70%-owned by Areva Resources Canada, Denison Mines holds a 22.5% and Ourd Canada holds the other 7.5%. The Cigar Lake mine is 50.025%-owned by operator Cameco, 37.1% by Areva, while Idemitsu Canada Resources and Tepco Resources owned minority stakes.