Cameco expects Australian regulator decision on uranium mine shortly
Canada’s Cameco (TSX:CCO)(NYSE:CCJ) said Wednesday it anticipates Australian regulators to make a decision on its proposed Kintyre uranium mine within weeks, even though the Saskatchewan-based miner will likely delay construction until prices for the nuclear fuel improves.
Brian Reilly, managing director of Cameco Australia, told WSJ.com he expected Western Australia state’s Environmental Protection Authority (EPA) to “very soon” make a recommendation to state and federal ministers on the project. The authorities will then make a final decision on whether Kintyre —located in the east Pilbara, near Karlamilyi National Park— can go ahead.
Cameco, the world’s third-biggest uranium producer, postponed the development of the mine on the wake a major collapse of uranium prices related to the Fukushima nuclear accident in Japan in 2011. At the time, the company said the project likely wouldn’t be viable if uranium prices fell below $67 a pound.
Since then, the atomic fuel prices have fallen about 60%. They dropped to $28 a pound on May 19, the lowest level since May 2005, according to data from Ux Consulting Co. in Roswell, Georgia. Prices have tumbled 17% this year and closed at $28.50 yesterday.
One nuclear plant in southern Japan cleared an initial safety hurdle on Wednesday, which could make it the first nuclear facility to restart under tough new safety regulations.
In a separate development the company announced that ore from its Cigar Lake mine, in Saskatchewan, would not be milled until early 2015, instead of before the end of 2014, due to problems freezing the ground.
Cameco freezes the ore zone and surrounding ground to prevent water from flooding production areas, but freezing has not advanced as quickly as expected, it said.
The firm first expected to open Cigar Lake in 2007, but two floods pushed the launch of the mine well behind schedule. The mine finally began production in March this year.
Image courtesy of Cameco.