The suspension of uranium production at Canada’s McArthur River and Key Lake, which began in January, is to be extended "for an indeterminate duration", Cameco CEO Tim Gitzel said on 25 July.
The announcement followed publication of Cameco's second-quarter results, which Gitzel said reflected the impact of a weak uranium market and actions taken by the company aimed at increasing long-term shareholder value. "We continue to expect to generate strong cash flow this year as we draw down inventory and focus on operating efficiently. However, we have not seen the improvement needed in the uranium market to restart McArthur River and Key Lake."
The decision will result in the permanent layoff of about 550 site employees, including those temporarily laid off since January, as well as a reduction of approximately 150 positions at the company's corporate offices. Some 200 employees will remain at the McArthur River and Key Lake sites to keep the facilities in a state of safe care and maintenance. Cameco's share of the care and maintenance sites are expected to be between CAD5-6m ($3.8-4.6m) a month after the layoffs take effect.
"As 2018 unfolds, we will continue to evaluate the market signals. However, we remain resolved in our efforts to maximise cash flow, while maintaining our investment-grade rating so we can self-manage risk and preserve the value of our tier-one assets," Gitzel noted.
Cameco's joint venture partner Orano has also agreed to extend the suspension. The deadline for Orano's repayment of up to 5.4m pounds of uranium concentrate to Cameco has been extended until 31 December 2023.
Photo: McArthur River has an annual production capacity of 18.7 million pounds U3O8, but is currently in a state of care and maintenance (Photo: Cameco)
