A deal signed Thursday will enable Canadian companies to export Canadian uranium to China.
Canada and China signed a “supplementary protocol” to a pact on nuclear co-operation reached in 1994, Canadian Foreign Affairs Minister John Baird said.
The protocol, signed by Baird and Liu Tienan, head of China’s National Energy Administration, will expand a nuclear co-operation agreement that’s been in place since 1994.
The deal should benefit companies like Saskatoon-based Cameco Corp.
Cameco signed long-term uranium supply deals with Chinese companies in 2010, one with China Nuclear Energy Industry Corporation for 23 million pounds of uranium concentrate through 2020. The second deal is with China Guangdong Nuclear Power Holding Co., Ltd. for 29 million pounds of uranium concentrate through 2025.
But the pre-existing agreements with China were restricted to sourcing uranium from non-Canadian sources.
“Under the old agreement they wouldn’t have been able to sell Canadian uranium,” Baird said. “So it would have been a big boom to Kazakhstan and a big loss for Saskatchewan.
“We have made this one of our priorities with our relations with China, and this will facilitate the use of Saskatchewan and Canadian uranium for export to China ... It is our hope and expectation that this will create more jobs and wealth for the people of Saskatchewan.”
Cameco president and CEO Tim Gitzel welcomed the announcement.
“The ability to export Canadian-sourced uranium to China is incredibly important to our company,” Gitzel said. “It will mean more jobs, more development and more investment here in Canada by Cameco and other uranium producers hoping to access this huge and growing market for nuclear energy.”
Cameco, which will release its second-quarter results next week, has stated it wants to increase annual production to 40 million pounds by 2018. The company’s much-anticipated Cigar Lake project in northern Saskatchewan is scheduled to come on stream in late 2013.
Negotiations for the Chinese deal were completed during Prime Minister Stephen Harper’s trip to China in February.
“We’ve worked hard over the last five or six months to get the legal text scrubbed and are pleased to bring it into force (Thursday),” Baird said.
“We’ve worked hard over the last five or six months to get the legal text scrubbed and are pleased to bring it into force (Thursday),” Baird said.
“This does give some certainty to Cameco and the future of the industry in Canada. China is the world’s fastest growing nuclear program, and obviously the fastest growing market for uranium, so that offers significant opportunities.”
China is one of the world’s largest and fastest-growing consumers of nuclear energy. According to the World Nuclear Association, there are currently 14 reactors in operation in the country, 26 under construction, and additional units in the planning stage.
The future of global demand for nuclear energy was called into question last year when a tsunami and earthquake badly damaged the Fukushima Daiichi nuclear plant in Japan, causing a radiation release.
The fate of Japan’s nuclear industry remains uncertain and the crisis prompted some European countries to rethink or cancel altogether their nuclear expansions.
Baird said the new deal maintains the safeguards that Canadian uranium and nuclear technology will be used for peaceful means.
“We have strong, international legal obligations to ensure the peaceful use of uranium and nuclear technology and this new agreement will facilitate literally billions of dollars of sale of uranium to China for civilian nuclear electricity generation,” he said. “It provides safeguards and verification mechanisms that allow us to ensure that our requirements and safeguards are met.”
slarson@thestarphoenix.com
“We have strong, international legal obligations to ensure the peaceful use of uranium and nuclear technology and this new agreement will facilitate literally billions of dollars of sale of uranium to China for civilian nuclear electricity generation,” he said. “It provides safeguards and verification mechanisms that allow us to ensure that our requirements and safeguards are met.”
slarson@thestarphoenix.com