“The uranium industry is capable of responding to the growth in demand and Cameco will play a major role,” said Grandey.
Grandey said that increasing demand for uranium stems from a growing hunger for electrical power and the awareness of nuclear energy’s low greenhouse gas emissions. Grandey noted the US government continued financial backing for new nuclear plants under President Barack Obama.
According to Grandey, the Nuclear Energy Institute expects four to eight reactors to be built in US in the next 10 years.
Cameco is exploring for new zones to sustain future production at its McArthur River mine in the Canadian Prairie province of Saskatchewan. The company is also making steady progress on remediating its Cigar Lake mine in Saskatchewan. Grandey said that he could not expect when production would begin. The mine flooded in 2006.
Cameco is in discussions on supply agreement with China.
Grandey said, “We hope, as time goes on, to get a greater presence in that market on a sustained basis. Do I think we’ll succeed? Absolutely.”
Cameco can afford to make acquisitions, but there are little opportunities of interest.
The price of uranium is looking to balance in the range of $40 to $60 per pound, but Grandey anticipates lot of volatility in 2009.
Cameco has suspended production of uranium hexafluoride (UF6) in December 2008 at its Port Hope, Ontario, plant, due to a contract dispute with a key chemical supplier. According to Grandey the production will increase slowly and starting early in the third quarter of 2009.
Grandey said that Cameco has not decided how it will divest its stake in Centerra Gold, whether by a secondary share issue or finding a strategic buyer, but said the company is in no rush.
