Canadian uranium major Cameco remains “very bullish” on the uranium market, citing the role of nuclear power in a global move towards electrification and decarbonisation.

CEO Tim Gitzel said on Wednesday that China would require an estimated quadrupling of nuclear power capacity to meet its goal of having 25-million electric vehicles on the road by 2030, while achieving carbon-neutrality before 2060.

“That would be about 200 reactors for China alone, double that of the US fleet, which is currently the largest in the world. So, demand for nuclear is increasing,” he said on the group’s third-quarter earnings call on Wednesday.

While demand is increasing, Gitzel said there were “big question marks” about where uranium would come from to fuel the growing nuclear fleet, owing to persistently low prices, shrinking secondary supplies and the end of reserve life and unplanned disruptions.

“We believe these fundamentals will lead to security of supply concerns and will allow us to layer in the long-term contracts necessary to support the restart of our McArthur River/Key Lake operations and solidify our role as a low-cost, safe, reliable, commercial supplier of the uranium fuel needed for carbon-free nuclear electricity generation.”

The company also believes that the Russian Suspension Agreement (RSA) in the US will create opportunities for commercial suppliers. Senior VP and CFO Grant Isaac said that since the completion of the RSA, interest in non-Russian supply of uranium and conversion had increased.

“We expected to see it, we are starting to see it and very excited about it because it creates a great opportunity for us with our Canadian supply,” he said.

The RSA extends the limits of uranium imports from Russia for another 20 years until 2040. It was previously set to expire on December 31, 2020, which would have resulted in unchecked imports of Russian uranium into the US.

FINANCIAL RESULTS
Meanwhile, Cameco reported a net loss of $61-million and an adjusted net loss of $78-million for the third quarter. The company said results were driven by normal quarterly variations in contract deliveries. The quarter was also impacted by ongoing purchase activity and additional care-and-maintenance costs of $18-million resulting from the proactive decision to suspend production at the Cigar Lake mine in response to the Covid-19 pandemic.

Cigar Lake was restarted in September and it took about two weeks to achieve initial production once restarted. Cameco’s share of production in the quarter was 0.2-million pounds and it is targeting production of up to 5.3-million pounds in total this year.

For 2020, an annual dividend of $0.08 a common share has been declared, payable on December 15.