A mine shaft at the Cameco Corp.’s McArthur River uranium mine site in northern Saskatchewan.Dave Stobbe/Reuters
Canada is the world's second largest uranium producer in the world, next only to Kazakhstan, according to the World Nuclear Association. And we export about 85 per cent of what we mine.
But the uranium sector went into a downturn in recent years, especially after Japan's post-tsunami nuclear reactor meltdown caused that country to shut down reactors, with ripple effects in other countries. However, with new reactors being built, especially in Asia, and the expected restart of more Japanese reactors in the next few years, some analysts are calling for demand, and spot prices, to increase.
Even with decreased global demand, the value of Canadian-origin uranium exports in 2013 amounted to about $1-billion, according to government figures. Exports are mainly to the United States, Europe and Asia.
Tim Gitzel, president and chief executive officer of Saskatoon-based Cameco Corp., oversees the largest high-grade uranium mines in the country: McArthur River and Cigar Lake, both in Saskatchewan.
Mr. Gitzel sees two major growth opportunities: China and India.
"China has the largest number of nuclear power plants under construction in the world," Mr. Gitzel says. Twenty-five reactors are under construction, and 26 are already in use.
Furthermore, according to the World Nuclear Association, China is looking to have more than a three-fold increase in nuclear capacity by 2020-21. Uranium is typically used in nuclear reactors to produce electricity, and a small portion is used for producing medical isotopes.
India, which is the world's second-fastest-growing market for nuclear fuel, signed its first long-term contract with Cameco earlier this year. The deal, unveiled by Prime Minister Stephen Harper and Indian Prime Minister Narendra Modi, is worth $350-million and involves Cameco supplying 3,220 metric tonnes to power India's reactors over the next five years. Nuclear reactors in India provide 3 per cent of the country's electricity needs, but with six reactors under construction Mr. Gitzel expects that number to increase.
"Both countries are pursuing rapid nuclear growth strategies to supply their growing populations and economies with a clean, reliable energy source," Mr. Gitzel says.
Heather Kincaide, program manager at the Asia Pacific Foundation of Canada, points out one potential problem for Canadian uranium exporters is that India and China are interested in being more self-reliant. "In China and India, reducing import dependency is an explicit priority in energy policy."
Ms. Kincaide says China is in fact developing nuclear energy technologies to help reduce reliance on imported uranium.
However, the desire to become self-reliant is hindered by inadequate domestic production. Ms. Kincaide uses India as an example, with approximately 250 million people still lacking access to electricity. So it may be more viable to use imported energy, compared to domestic, simply because the resources are not there.
Outside of China and India Ms. Kincaide says, "Vietnam, Indonesia and Malaysia are also considering building nuclear power plants."
Inside North America, Mr. Gitzel expects the demand for nuclear energy to remain relatively flat over the next decade. "There are a number of other sources of cheap energy at this time, which is likely why we do not see as much demand here as we do in other markets."
The current weaker Canadian dollar, though detrimental for some exporters – depending on what currency they sell their goods in – has not been too problematic for Cameco. Its products are priced in U.S. dollars, and the majority of production is incurred in Canadian dollars, so the effect of a lower loonie has generally been positive for the company.
Canada is poised to meet any uptick in global uranium needs. In addition to mining operations already planned for the near future, active exploration involving more than 40 companies continues in many parts of Canada, according to the World Nuclear Association. Aside from Saskatchewan, new prospects include Labrador and Nova Scotia in the Atlantic provinces, as well as Quebec, Nunavut and Ontario's Elliott Lake area.
Editor's note: Heather Kincaide of the Asia Pacific Foundation of Canada notes that 250 million people in India still lack access to electricity, not energy, as she was referenced as saying in a previous version of this article. This is the clarified version.