Initially intended to be a 10-month suspension, production at McArthur River in Saskatchewan – the world’s biggest uranium mine – and the nearby Key Lake mill has been extended for an “indeterminate duration”, Canadian uranium major Cameco announced on Wednesday.

President and CEO Tim Gitzel said that Cameco, which posted a $76-million net loss in the June quarter, had not seen the improvement needed in the uranium market to restart the two Saskatchewan mines, which were idled in January.

The suspension of production McArthur River and Key Lake will result in the permanent layoff of about 550 site employees, including those on temporary layoff since January, when the initial production suspension kicked in.

Cameco will keep about 200 employees on site during the care-and-maintenance period, which will incur costs of between $5-million and $6-million a month.

Employees at the head office will also lose their jobs, with about 150 positions being made redundant.

“It was a difficult decision to make, because of the impact it will have on our employees, their families, and other stakeholders, but we must take this action to ensure the long-term sustainability of the company. We thank our workforce for their hard work and dedication.

“We will not produce from our tier-one assets to deliver into an oversupplied spot market. Until we are able to commit our production under long-term contracts that provide an acceptable rate of return for our owners, we do not plan to restart,” said Gitzel.

Cameco will incur between $40-million and $45-million in severance costs in the third quarter.

In the second quarter, Cameco realised revenue of $333-milion, down 29% on the $470-million reported a year earlier. The group’s net loss widened to $76-million, from $2-million in the June 2017 quarter. The adjusted net loss narrowed to $28-million, from $44-million in the comparative period.assets.

The announcement was released after the market closed in Toronto.