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General Market Commentary
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General Market Commentary
Uranium markets starting to improve, says Cameco’s Gitzel
The following is a transcript of remarks made by Cameco (TSX: CCO; NYSE: CCJ) president and CEO Tim Gitzel during the company’s first quarter conference call on May 1 on the topic of uranium markets and Cameco’s production strategy. In the first quarter, Cameco had an adjusted net loss of $33 million on uranium mining revenues of $207 million and fuel services revenues of $83 million.
In the uranium market, fundamentally, it’s better than it was a year ago. From 30,000 feet, 2018 was a pivotal year for the uranium market. Why do I say that? It’s because from a demand point of view, consumption has returned to pre-2011 levels. We have now filled in the pothole of lost demand, and that demand continues to grow.
There are more than 50 reactors under construction (worldwide) and as each one of these reactors gets turned on, it represents net new demand.
In China alone, the fastest growing nuclear energy market in the world, there are 45 reactors operating and 11 units under construction. And it just approved construction of two new reactor complexes, implementing the domestic Chinese Hualong One reactor technology — the Dragon, as they call it —the first new build approved in over three years.
CNNC chairman, Mr. Yu, indicated recently that China expects to be able to build six to eight new reactors each year if the project approval process returns to normal which would allow it to meet its 2030 target of 120 gigawatts. In addition, we’re beginning to see a number of other countries and organizations come up with some very positive policy messages.
There’s growing recognition of the role of nuclear power must play in ensuring safe, reliable, and affordable electricity while tackling climate change and air quality issues.
Recently in the United States, a bipartisan group of senators reintroduced legislation Bill 903 – the Nuclear Energy Leadership Act, or NELA as it’s called.
The bill is aimed at boosting U.S. nuclear energy innovation and ensuring advanced reactors can provide safe, affordable and reliable electricity. In addition, the U.S. Secretary of Energy Rick Perry announced the US$3.7-billion loan guarantee to support completion of the two reactors currently under construction in the United States.
He indicated that the Vogtle project (in Georgia) is critically important to the U.S. administration’s direction to revitalize and expand the U.S. nuclear industry, calling it the “Real Green New Deal.”
In New Jersey, the Board of Public Utilities voted to award zero-emission credits to three New Jersey nuclear power plants, and the U.S. Supreme Court said it would not hear an appeal challenging the rights of Illinois and New York to subsidize nuclear power plants.
In India where they are targeting 12 new reactors, the Secretary of the Department of Atomic Energy recently stated that the Indian government supports nuclear technology as an irreplaceable source of clean energy.
I can tell you this growing recognition of the benefits of nuclear is not new, I’ve seen this movie twice before.
Nuclear falls out of favour politically in a number of countries that announce they’re going to reduce reliance on, or phase out, nuclear.
Then the world steps back and examines its options for carbon-free baseload sources of electricity and realizes the options are limited.
There’s hydro, which is an option for some countries but not all, and there’s nuclear. And they realize the nuclear could provide the power they need, not only reliably, but also safely and affordably and in a way that avoids emitting greenhouse gases.
There’s no doubt there’s a role for solar and wind but they aren’t baseload.
Our healthcare, education, communication and transportation systems can’t just “make do” if the sun doesn’t shine and the wind doesn’t blow.
Then consider China and India’s ambitions for increasing the number of electric vehicles on their roads. I can tell you if they’re powered by carbon-producing sources of electricity, there’ll be doing more harm than good.