Canada mine flood not seen cutting uranium stocks
Date: 23-Apr-03
Country: USA
Author: Chris Reese
A nine-month stockpile of uranium and increased production from overseas will offset the loss of the McArthur River mine in northern Saskatchewan, which normally turns out over half of North American uranium output, the officials said.
"If they were going to be out of the market for a couple of years it could certainly affect long-term supply, but I don't think that is the case," said Julian Steyn, analyst with Washington, D.C.-based Energy Resources International, Inc., an energy consulting company.
"Cameco itself has been carrying a large inventory of uranium," Steyn said.
Cameco, the world's largest supplier of uranium, was forced to shut the McArthur River mine on April 6 when water flooded its deepest shafts and tunnels.
The company has said the mine will likely be shut for four to six months while the leak is plugged, the water is pumped out, and repairs are made to equipment that is now submerged.
McArthur River produced 18.7 million pounds of uranium in 2002, which represents about 57 percent of total annual North American uranium production of about 33 million pounds.
The U.S. nuclear power industry uses about 55 million pounds per year of uranium, almost exclusively to fuel its 103 nuclear power plants. Nuclear power accounts for about 20 percent of all electricity used in the United States.
"We have sufficient inventory that the time frame that we are expecting to be out of production, we think we can make that up with the existing inventory we have and production from other mines and our supplies from other sources," Cameco spokeswoman Alice Wong said.
Cameco owns 70 percent of the McArthur River mine, with the remaining 30 percent held by Cogema, the uranium mining arm of French nuclear company Areva (CEPFi.PA).
The mine's closure also has had no impact on the spot price of uranium.
"We don't expect to pay more due to the temporary shutdown (of McArthur River)," said Ann Mary Carley, spokeswoman for Exelon Corp. (EXC.N), which operates 17 nuclear reactors in the U.S. and purchases some of its uranium from Cameco.
Carley said an Australian uranium producer has already said it will double its uranium output to make up for any shortfall.
Australia is the world's second largest uranium producer after Canada, followed by Niger, Namibia, and the United States.
Water is flooding into the McArthur River mine about 1,740 feet (530 meters) underground. The water is currently being diverted into a storage shaft, but some of the deepest equipment in the mine, below 2,100 feet (640 meters), has been flooded.