Cameco Port Hope workers get 6% pay hike

Inside the UF6 plant

Cameco (TSX:CCO) (NYSE:CCJ) announced Friday that unionized employees at Cameco’s Port Hope conversion facility have voted to accept new collective agreements.

According to the Saskatoon-based uranium miner, one of the world’s top producers, more than 250 employees have agreed to three-year contracts that include a 6% wage increase over the term of the agreements.

Total workforce at the Port Hope conversion facility, including managers and salaried employees, is roughly 370.

Cameco’s Port Hope plant is the only uranium conversion facility in Canada producing uranium hexafluoride (UF6) and the only commercial supplier of natural uranium dioxide (UO2) conversion services needed to produce fuel for Candu nuclear reactors.

Cameco is expanding operations in Canada and in June started commercial operations at Cigar Lake project which boast full annual production of 18 million pounds expected to be achieved in 2018.

Cigar Lake follows another, albeit much smaller project, to kick off production this year – the company’s North Butte mine in Wyoming is expected to contribute 300,000 pounds in 2013 and ramp up to more than 700,000 pounds per year by 2015.

The uranium market has been under huge pressure since the earthquake and tsunami that struck Japan in March 2011, crippling the Fukushima Dai-Ichi nuclear power plant and prompting many nations to curtail nuclear power.

Uranium spot price (U3O8) plunged to below $40.00 for the first time since March 2006 last month and remain well below the $66.50 prior to Japanese catastrophe.

In May Cameco posted a dramatic first quarter profit drop of 93% as uranium sales fell and prices continued to soften.

Cameco said it produced 5.9 million pounds of uranium during the quarter and sold 5.1 million pounds. A year earlier, it had output of 4.8 million pounds and sales of 8.2 million pounds.

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