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Cameco awarded $40.3m in damages in TEPCO contract dispute

Cameco’s Cigar Lake mine in northern Saskatchewan is the world’s highest-grade uranium mine. Image by Cameco.

A tribunal of international arbitrators ruled in favour of Cameco (TSX: CCO; NYSE: CCJ) in the miner’s contract dispute with Tokyo Electric Power Company Holdings, TEPCO. 

According to a corporate press release, the tribunal rejected TEPCO’s assertion that it had the right to terminate its uranium supply agreement alleging force majeure, and awarded damages to Cameco of $40.3 million. Damages were based on the tribunal’s interpretation of losses under this supply agreement.

However, the world’s largest publicly traded uranium miner was asking for $700 million in damages. Since 2017, its legal team had been alleging that losses due to the cancelled contract would add up $1.3 billion in lost revenue and would affect about 9.3 million pounds of uranium deliveries through 2028, including about 855,000 pounds annually in 2017, 2018 and 2019.

“We are pleased that the Tribunal agreed that TEPCO was not entitled to terminate the supply agreement, but we are disappointed with the amount of damages awarded,” Cameco’s president and CEO, Tim Gitzel, said in the media statement. “However, remember we had already removed this contract from our financial outlook. So, overall the result is positive for us.”

Gitzel explained that the supply agreement does not allow for an appeal of the court’s decision.

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