Canada, India agree to $350-million uranium supply deal

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Canada and India are back in the nuclear business together after a decades-long moratorium with a uranium sale to New Delhi that opens the door for Canadians to profit from a growing Indian appetite for power from reactors.

Prime Minister Stephen Harper and Indian Prime Minister Narendra Modi unveiled a $350-million deal on Wednesday for Canada's largest uranium producer, Cameco Corp., to supply 3,220 metric tonnes to power India's reactors over the next five years.

Canada banned exports of uranium and nuclear hardware to India in the 1970s after New Delhi used Canadian technology to develop a nuclear bomb.

Mr. Modi is the first sitting Indian prime minister to make a bilateral visit to Canada in more than 40 years – before relations chilled after New Delhi's nuclear testing.

"Canada giving uranium to India is a mark of trust and confidence," the Indian leader said.

Mr. Modi, whose country aims to increase its share of electricity generated by nuclear power to 25 per cent by 2050 from 4 per cent today, told reporters in Ottawa how highly he prizes the radioactive ore.

"For me, uranium is not just a mineral. For me, it is an article of faith [and] trust," Mr. Modi said. "This is to save the world, in effect, to save the world from global warming and climate change."

Cameco CEO Tim Gitzel said the Indian uranium deal represents a small portion of annual sales. For instance, Cameco expects to sell nearly 15,000 metric tonnes in 2015.

The agreement paves the way for the Saskatchewan company, the world's second-largest uranium producer, to sell more in the years ahead as India vastly expands nuclear power generation. India's nuclear energy building program is second only to China's in scale.

"Today, they have 21 nuclear reactors operating. They have six under construction. They're building dozens more over the next few years," Mr. Gitzel said in an interview.

He said much of the long-term growth Cameco sees in the uranium industry will come from India.

"We want to be the preferred seller to India," he said. "Today is just the start of the relationship."

Mr. Gitzel said Canada's competitors include Kazakhstan, the world leader in uranium production, as well as Russia and the French.

Nuclear trade between Canada and India has the potential to go far beyond uranium, extending to exports of hardware.

However, potential foreign hardware suppliers fear that, under India's nuclear liability law, they could be held legally responsible in the event of a nuclear power catastrophe.

A deal reached by U.S. President Barack Obama and Mr. Modi in January appears to represent a breakthrough on this matter. The leaders agreed the legal liability of U.S. nuclear technology suppliers would be limited. New Delhi would presumably extend this accommodation to other country's suppliers.

Saskatchewan Premier Brad Wall, who played a major role in the deal, characterized the sale as helping a country with similar values and a boon for his province.

"Our uranium producers are excited and ready to supply product to India, the world's largest democracy," Mr. Wall said.

He said 45 per cent of Cameco's work force in Saskatchewan is aboriginal. "This is the largest industrial employer of First Nations and Métis people in our province."

The Premier said a starting job as a miner pays $60,000 to $70,000. "These are good careers."

Critics of the deal suggest providing India with uranium for its nuclear power plants will free up New Delhi to use other stores of the radioactive ore for nuclear weaponry. Mr. Wall said Canada is "responsible for our uranium" – and ensuring it is used for peaceful means by India – and should not deny itself business in rapidly growing markets such as India and China.