Cameco signs $1.9B uranium supply deal with India

Cameco (TSX: CCO; NYSE: CCJ) signed an estimated C$2.6 billion ($1.9 billion) long-term agreement to supply uranium ore concentrate to India for use in the country’s fleet of nuclear reactors.

Canadian Prime Minister Mark Carney announced the accord Monday in Delhi during a trade mission to India. The estimated deal value is based on a uranium price of $86.95 per lb., Cameco said in a statement.

The Saskatchewan-based company will supply almost 22 million lb. of uranium ore concentrate to India over nine years on market-related price terms. Deliveries are expected to start in 2027 and run through 2035, according to the agreement. Cameco had previously supplied uranium to India under a five-year contract that began in 2015.

“This represents a big step-up in long-term contracting activity early in the year for a market in which overall term contracting remains below replacement rate levels,” BMO Capital Markets commodities analysts said in a note on Monday. The total 2024-25 term contracting amounts to 116 million lb., BMO analysts Helen Amos and George Heppel said.

Growing demand

India, which has 24 operating reactors and a current generating capacity of about 8 gigawatts, is planning to deploy dozens more to reach 100 gigawatts by 2047.

The deal highlights an emerging trend of sovereign buyers locking up large volumes from multiple suppliers at a time when global demand is growing and available supplies continue to become more uncertain and constrained, Cameco said.

“Cameco is proud to be a strategic partner with India to help meet its civil nuclear fuel needs and support its trade relationship with Canada,” CEO Tim Gitzel said. “India is embarking on an ambitious nuclear expansion to power its development plans and meet the future energy security needs of its people. That isn’t possible without a stable supply of uranium fuel.”

Monday’s supply deal “supports strategic positioning as India expects to exponentially grow [its] nuclear fleet,” TD Cowen mining analyst Craig Hutchison said Monday in a note. It represents about 12% of Cameco’s annual output of uranium ore concentrate, he added.

The Cameco deal is part of a new strategic energy partnership that Canada and India signed during Carney’s visit. Both countries also agreed to intensify cooperation on critical minerals and energy sources.

Cameco included the volumes of the India contract in the long-term contracting volumes that it disclosed last month.

Uranium’s spot price was at $86.55 a lb. on Monday after spiking to a two-year high of $101.50 in late January, according to Trading Economics. Industrial commodities fell as the dollar rebounded, it said, though the price is still up 10% this year on the bullish outlook for the nuclear fuel.