Canada, India Reach $368M Deal On Uranium Supply

Canada and India have reached a CA$350 million [$368 million] uranium supply deal that will be facilitated by Cameco Inc. in Saskatchewan province. The company will deliver India 3,220 metric tonnes of the mineral over the next five years to power its nuclear reactors. Shares of Cameco, Canada’s largest uranium producer, jumped five percent on Wednesday on the TSX to CA$19.80.

Brad Wall, Saskatchewan Premier, had earlier told Bloomberg the province is excited over the deal because it is “huge.” He said it will translate to tax revenue, job retention and new jobs. “Depending on all the specifics, you’re going to be talking about hundreds of millions of dollars' worth of sales over some period of time.”

The monumental signing was done during the second day of a three-day visit to Canada of Indian Prime Minister Narendra Modi. “Canada giving uranium to India is a mark of trust and confidence,” he said. Canadian exports of uranium and nuclear hardware to India got banned in the 1970s after the country’s technology was used by New Delhi to develop a nuclear bomb.

Mr Modi told reporters in Ottawa his country now highly values the mineral because it can be a tool “to save the world from global warming and climate change.” India plans to expand its nuclear-power generated electricity from the current four percent to 25 percent by 2050.

Tom Gitzel, Cameco president and CEO, lauded the agreement, saying it opens the door to a dynamic and expanding global uranium market. He said in a statement that he sees much of the industry’s long-term growth will come from India’s demands. “This emerging market is key to our strategy." Financial Post reports the deal will boost Cameco’s revenue by three percent, based on uranium’s current spot prices of US$39.50 per pound.

Canada will commence the supply of uranium to India from 2015. India currently has 13 reactors under IAEA safeguards, which provide 60 percent of India’s installed 5,780 megawatts nuclear generation capacity. Other nations supplying uranium to India include Russia, Kazakhstan, France, and Uzbekistan.

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