Category Archives: uranium and nuclear

Saskatchewan’s economy will lead the country in GDP growth in 2018 and 2019 – RBC

RBC projecting Sask. economy to rebound in 2018 and 2019

Projecting a 2.7% growth in both years due to agriculture, with help from oil and gas

CBC News Posted: Dec 12, 2017 10:30 AM CT Last Updated: Dec 12, 2017 10:30 AM CT

Rebounds in the agricultural and mining sectors along with rising investment spending will be the main factors behind the economic rebound in 2018 and 2019, according to the RBC forecast.

Rebounds in the agricultural and mining sectors along with rising investment spending will be the main factors behind the economic rebound in 2018 and 2019, according to the RBC forecast. (Courtesy Paul Dornstauder)

Saskatchewan’s economy will lead the country in GDP growth in 2018 and 2019, according to RBC’s economic forecast.

 

RBC is projecting a growth of 2.7 per cent both years, if all goes well.

The economy is expected to receive a boost from the agriculture sector, with some help from oil and gas in the strengthening energy sector.

“Our view is that rebounds in the agricultural and mining sectors along with rising investment spending will be the main factors accelerating overall GDP growth over the next two years,” the report says.

Capital spending and the construction industry may have a good year, due to improvement in the mining sector as well.

Potash, after a decline in production in 2016, has increased so far this year thanks to a strong global demand and key contracts with China and India, the report says.

In addition, the bank is forecasting employment in the province to rise by half a percentage point and the unemployment rate to remain at 5.7 per cent next year.

Equalization payments – 2018-19 – something’s wrong with this system

As Brad Wall posted on Facebook . . .

Equilization payments 2018-19

Quebec is cutting income taxes, sending cheques to parents, and will balance their budget.

Wondering where they got the money?

This year, Quebec is receiving $11.7 BILLION in equalization, which makes up 11% of their total revenue. That’s $650 MILLION more than last year.

Saskatchewan taxpayers are contributing $580 million to equalization just this year and again receive ZERO dollars in equalization as our finances struggle with the challenge of stubbornly low commodity prices.

Something isn’t right.

Kazakh supply shock to jolt uranium price from $23 to $30 a pound

Kazakh supply shock to jolt uranium price

Frik Els

Mining.com

The announcement made by uranium giant Cameco a month ago that it’s suspending operations at its flagship McArthur River mine in northern Saskatchewan, Canada did little to move to languishing uranium price. Last week the nuclear fuel was pegged at $23 a pound, a level it has hovered around for long stretches of 2017.

This type of supply shock will spur strength in the spot U3O8 price as a significant amount of expected production for 2018-20 is removed

On Monday, the world largest producer of uranium, surprised the beleaguered market with a larger than expected cut to production of its own.

Kazakhstan’s state-owned Kazatomprom announced intentions to reduce its output of U3O8 by 20% or 11,000 tonnes (around 28.5m pounds) over the next three years beginning in January 2018. According to the company roughly 4,000 tonnes will be cut in 2018 alone “representing approximately 7.5% of global uranium production for 2018 as forecast by UxC.”

Rob Chang Managing Director and Head of Metals & Mining – Canada at Cantor Fitzgerald in a research note on Monday said Kazatomprom is assuming a greater leadership role in the market and the bigger than expected cut is “the type of supply shock that will spur strength in the spot U3O8price as a significant amount of expected production for 2018-20 is removed.”

Chang said that combined with the halt at McArthur River an estimated 42.3M lbs of expected production has been removed from the market. Annual primary production is in the region of 140m pounds according to Cantor Fitzgerald modelling:

We expect this news to push spot uranium prices to the mid-high US$20/lb range and perhaps into US$30/lb. However, the degree of movement may be muted at first due to fact that there are a limited number of qualified purchasers of uranium – making it a less efficient market.

We estimate that less than 10% of total uranium demand for 2018 and 2019 are uncovered, as utilities have shored up what were once large shortages through spot purchases or short contracts. As such, there is less of an impetus for utilities to make purchases immediately.

Uraniumn price forecast Dec 2017

Inventory levels are also a concern as we estimate that there are 800-1,200M lbs of total above ground inventory of which about 700-800M lbs are held by utilities. We do not believe that all of it is available for sale as significant portions are held for strategic purposes and necessary utility needs. It will be interesting to see how much of a dampening effect these inventories will have on this news.

At the beginning of the year Kazatomprom announced output cuts of 5.2 million pounds, equal to 3% of global production, while in May the US Department of Energy also curtailed the amount of uranium that it disperses into the market.

The price of U3O8 fell 41% in 2016 with the industry tracker UxC’s broker average price hitting 12-year lows below $18 per pound in November last year.

 

Saskatchewan Mining Association supports Government of Saskatchewan’s Climate Change Strategy

MEDIA RELEASE

Monday, December 4, 2017

FOR IMMEDIATE RELEASE

Regina:  The Saskatchewan Mining Association (SMA) is supportive of the Government of Saskatchewan’s Climate Change Plan which was released earlier today.  While the Saskatchewan Plan has a lower emissions threshold than the Federal Climate Change Plan, the sector-based, multi-faceted approach will ensure the ‘Made in Saskatchewan Plan’ is effective in reducing GHG emissions while ensuring the sustainability of Saskatchewan communities.

As Canada transitions to a low-carbon economy, the Saskatchewan Climate Change Plan features flexible compliance mechanisms, including adoption of innovative and best in class technology that will allow mining to continue to be a pillar of Saskatchewan’s economy while continuing to provide clean energy and food to the world.

The Saskatchewan mining sector is particularly sensitive to a price on carbon as it represents an additional direct cost for producers that international competitors aren’t paying. “Ensuring the mining sector remains globally competitive is vitally important to Saskatchewan, particularly in this period of low commodity prices,” said Pam Schwann, SMA President.    “We need to be mindful that, as we work to reduce GHG emissions, mining investments and jobs are not being exported to other international jurisdictions that don’t have the robust environment and safety regulatory framework that exists in Saskatchewan and Canada.”

Saskatchewan’s mining operations account for 3% of provincial GHG emissions. “Our members are committed to bringing our expertise to the table and working with the province to reduce GHG emissions from the mining sector.”  said Schwann.

-30-

About SMA

Saskatchewan Mining Association is an industry-driven organization representing the mining and mineral exploration industry with over 25 mining operations in the province.

SMA advocates on behalf of members on issues related to provincial and federal regulatory changes, develops and supports educational outreach programs, organizes and hosts public outreach and membership events.  Please visit http://saskmining.ca/

 

For more information please contact:

Pam Schwann, P. Geo, MSc

President, Saskatchewan Mining Association; (306) 757-9505

Young men in Sask. making more with apprenticeships than bachelor’s degrees: Stats Can

Young men in Sask. making more with apprenticeships than bachelor’s degrees: Stats Can

Sask. deviates from Canada-wide trend, in which those with apprenticeship certificates make 11% less

By Micki Cowan, CBC News Posted: Nov 29, 2017 11:54 AM CT Last Updated: Nov 29, 2017 6:12 PM CT

The number of young men getting apprenticeship certificates in Canada jumped nearly three percentage points since 2006.

The number of young men getting apprenticeship certificates in Canada jumped nearly three percentage points since 2006. (Shutterstock)

Young men in Saskatchewan are increasingly looking to make their fortunes in the trades, according to a new Statistics Canada report released Wednesday — and they seem to be making a bit more here than those with university undergraduate degrees.

Statistics Canada found that last year, 7.8 per cent of men in the country had an apprenticeship certificate, up from 4.9 per cent in 2006.

The proportion of men between 25 to 34 with certificates was even higher in resource-rich Prairie provinces like Saskatchewan.

Here, 11.9 per cent of young men had trades certificates last year, which was the second-highest proportion among provinces in Canada.

Anne Neufeld, vice-president academic of Saskatchewan Polytechnic, said the numbers indicate that more people are seeing the trades as a viable career option.

“There are many people who really like to work with their hands — they like to work outdoors, for example. So these trades opportunities are very, very attractive for these individuals, and their long-term career prospects are very, very strong,” Neufeld said.

She said 94 per cent of graduates from Saskatchewan Polytechnic’s programs have jobs within six months.

“So we’re not only attracting them, we’re graduating them, they’re finding well-paid jobs and they’re staying in the province to support the economy,” she said.

Fortune seeking

In Saskatchewan, the report found men were also making more money with apprenticeship certificates than with bachelor’s degrees — bucking the Canadian trend.

The median annual earnings for apprenticeship certificate holders in Saskatchewan was $86,059, compared with $84,825 for those with a bachelor’s degree.

Neufeld said Saskatchewan Polytechnic graduates’ starting salaries are just under $50,000 per year.

Canada-wide, men with apprenticeship certificates earned 11 per cent less than men with bachelor’s degrees.

Women’s trades stats lower

The percentage of women with apprenticeship certificates across the country is still much lower than men. According to the Stats Can report, that number has been stable since 2006 at less than two per cent.

Saskatchewan has more women with trades training, but the proportion dropped in the past decade from 2.7 per cent to 2.3 per cent. However, more women have a bachelor’s degree or a more advanced degree, with that number going from 24.6 per cent to 35 per cent.

‘We need to first create the role models.’– Anne Neufeld, Sask. Polytechnic

Neufeld said her school is prioritizing getting more women into the trades, although she said that takes time.

She noted that she is the first female vice-president academic the school has ever had.

She said boys often have an uncle or father in the trades they can look up to.

“Our goal is that we can have young girls and women who would have an aunt, a mother, an older sister in that field — so we need to first create the role models, and then I believe that will attract more girls and younger women into this fabulous career choice,” she said.

One method the school is using is summer camps that allow school-aged girls to give carpentry or welding a try.

Across Canada, women with apprenticeships had lower earnings than those with degrees, according to Statistics Canada.

The report said this shows women are apprenticing in lower-paying trades. Nearly three in 10 women chose hairstyling as their apprenticeship, with median earnings of $34,319.

Union thrilled with salary, benefits deal for laid-off Cameco workers

‘It’s way more than I would ever have anticipated’: Union thrilled with salary, benefits deal for laid-off Cameco workers

ALEX MACPHERSON, SASKATOON STARPHOENIX

Published on: November 14, 2017 | Last Updated: November 14, 2017 4:45 PM CST

Cameco Key Lake

Cameco Corp.’s Key Lake uranium mill in northern Saskatchewan. CAMECO CORPORATION / SASKATOON

Workers affected by Cameco Corp.’s decision to temporarily close two uranium production sites in northern Saskatchewan will be paid 75 per cent of their base salary and retain their benefits during the 10-month layoff, according to the union representing them.

United Steelworkers (USW) Local 8914 announced the agreement with Cameco in a social media post on Monday. Denis O’Hara, the union’s interim president, said in an interview that the money will come from employment insurance (EI) plus “top-ups” from the company.

“It’s way more than I would ever have anticipated,” O’Hara said less than a week after Cameco announced plans to temporarily shut down its McArthur River mine and Key Lake mill, beginning in January, in the face of what it called “unsustainably” weak uranium prices.

The production halt is expected to affect 560 Cameco employees and 285 contractors. O’Hara said while it’s not yet clear how many USW members will get pink slips, Cameco’s actions mean the workforce will be around next year when the operations are expected to start up again.

“This enforces my opinion of Cameco being a caring employer. They care about their employees and the communities they come from,” O’Hara said, noting that the agreement will be especially beneficial for the roughly 49 per cent of workers who live in the province’s north.

Cameco said in a memo to employees last week that it was working on a plan to top up EI benefits and provide group benefits during the shutdown. Tim Gitzel, the company’s president and CEO, said in an interview that the company will need them when the operations are restarted.

Company spokesman Gord Struthers confirmed the agreement in an email on Tuesday, noting that Cameco will top up EI and continue “selected benefits” for permanent unionized and salaried staff.

“Cameco respects people and we want to help our employees and their families get through this period. When it’s time to restart production, we will need the many skilled and experienced people who operate these facilities,” Struthers said.

Cameco has been struggling since the 2011 Fukushima Daiichi disaster sent uranium prices into freefall by drastically reducing demand for nuclear fuel. The company responded by cutting costs, part of what it calls a “lower for longer” business strategy.

Despite temporarily closing its Rabbit Lake mine in April 2016 and slashing its corporate workforce, however, the company continued to struggle as uranium prices fell by more than 70 per cent. Last month, Cameco reported its fourth consecutive quarterly loss.

“There’s just today too much uranium out there,” Gitzel said last week. “We have a good inventory of uranium at Cameco that can sustain us that we can put into profitable contracts … We can actually buy uranium cheaper than we can produce it.”

Cameco CEO reassures workers, investors over mine closure

Cameco CEO reassures workers, investors over mine closure

Saskatoon / 650 CKOM
Bryn Levy
Cameco CEO reassures workers, investors over mine closure

A worker at Cameco’s uranium milling operation in Key Lake, Sask. (Cameco)

Cameco president and CEO Tim Gitzel faced questions from media and investors in a wide-ranging conference call early Thursday morning.

The call came after the company announced Wednesday it was suspending operations at its McArthur River uranium mine and its uranium milling operation at Key Lake.

The move will see more than 800 workers placed on a temporary layoff.

Gitzel said the company made the decision in the face of a stubbornly weak global market for uranium.

In 2010, uranium was selling in the $60-a-pound range. The price tanked following Japan’s Fukushima disaster in 2011, and was hovering this week around $20-a-pound.

“The message is very clear that the market does not need more uranium. Behaving in a $20 market the same way we did when uranium prices were much higher, in our opinion, is neither rational nor sustainable,” Gitzel said during prepared remarks before he took questions.

Under current conditions, Gitzel said it made more sense to draw down the company’s inventory to meet its contract obligations, noting Cameco has contracts to sell uranium above market prices for years to come.

Gitzel stressed repeatedly throughout the call that layoffs at McArthur River and Key Lake would be temporary.

He said the company would continue to provide benefits for affected workers and would top-up their Employment Insurance cheques, all as part of efforts to retain staff through the shutdowns.

“These are good, solid people. We need them. (McArthur River) is going to keep running for 20 years,” he said.

Cameco investors will also be feeling some pain amid the poor uranium market conditions, with the company slashing the dividend paid on its stock to 8 cents per share as part of efforts to maintain its cash flow and keep servicing its debts. The dividend had previously been 40 cents per share.

Gitzel said all the company’s decisions were made with a view to maintaining Cameco’s long-term health.

In particular, he said the company was protecting its investment grade from rating agencies — a designation typically given to companies with a credit rating of BBB or better.

Gitzel said those investing in Cameco would be doing so because, in the longer term, the current low market price for uranium is unsustainable, with the company sitting on some of the lowest cost-of-production mines on Earth and well-positioned to take advantage of an eventual turnaround.

Asked if Cameco would consider selling off any of its ownership stakes in its mines, Gitzel gave a forceful vote of confidence in the long-term future for the industry in Saskatchewan.

“Sale of ownership? Not a chance. We’re not looking at that at all. In fact, if some Saskatchewan assets came available that were part of the joint ventures we’re in, we would look at purchasing them.”

The McArthur River and Key Lake shutdowns were expected to take about a month to complete, with some 200 workers kept on to maintain the sites following their anticipated closures at the end of January 2018.

Gitzel said it would also take about a month to get the facilities up-and-running again.

Sask. carbon reduction plan coming by end of year, says minister

Sask. carbon reduction plan coming by end of year, says minister

Feds have given provinces until 2018 to decide on their preferred option

Dustin Duncan

CBC News Posted: Oct 26, 2017 1:07 PM CT Last Updated: Oct 26, 2017 1:31 PM CT

The Saskatchewan government says its own tailored plan for how to reduce carbon emissions will be unveiled in the next month and a half.

But little else is confirmed about the highly-anticipated plan.

Environment Minister Dustin Duncan gave a brief update on the plan Wednesday, following a throne speech that doubled down on the province’s staunch opposition to the carbon-tax-or-cap-and-trade demand the federal government issued to provinces.

Duncan suggested that industry members will be warm to the Saskatchewan proposal once it’s released before the current session of the legislative assembly wraps on Dec. 6.

“We want to build in a great deal of flexibility for how industry is going to achieve the standards that we put in place,” said Duncan.

“We’re still working that through the process in terms of what type of flexible mechanisms will be in place.”

Duncan also said that the plan will “build on” the climate change white paper released by the province a year ago.

Besides calling on the federal government to redirect more than $2 billion earmarked for climate change measures in developing countries to research and innovation programs in Canada, the white paper also proposed charging a levy on large emitters.That money is to be used for new technology and innovation to reduce greenhouse gases.

Deadline looming

Duncan went on to refer to the plan as “a much more fulsome, well-rounded plan” than either a price on carbon or a cap-and-trade system.

Saskatchewan is cutting it close: the federal government has given provinces until 2018 to decide on their preferred option.

Duncan said Saskatchewan expects to hear from Ottawa about its tailored plan before the deadline.

The throne speech highlighted other ways the province has looked to cut its emissions, such as SaskPower’s intended aim to expand renewable power to 50 per cent of its total generating capacity by 2030.

The utility’s Boundary Dam 3 project, which the province poured $1.3 billion into, has cut the province’s carbon dioxide emissions by 1.6 million tonnes, taking the equivalent of 400,000 cars off the roads, according to the government.

 

 

 

Cameco reports quarterly losses due to weak uranium prices

Cameco reports quarterly losses due to weak uranium prices

Uranium company expects weaker earnings in 2017 than last year

CBC News Posted: Oct 27, 2017 7:43 AM CT Last Updated: Oct 27, 2017 7:43 AM CT

Cameco — one of the world’s largest uranium producers — reported on Friday a quarterly loss and cuts to its production outlook due to weak uranium prices.

The Saskatchewan-based company reported net losses of $124 million this quarter, and adjusted net losses of $50 million. That’s compared to a profit of $142 million at the same time last year.

“There has been little change to the market and we continue to face difficult conditions, with the average year-to-date uranium spot price down about 20 per cent compared to the 2016 annual average,” said president and CEO Tim Gitzel.

Revenue for the company fell 27 per cent this quarter, from $670 million in 2016 to $486 million for the three months ended Sept. 30.

The company’s uranium production volume and sales volume has also fallen. Cameco posted 3.1 million pounds of uranium produced for this year’s quarter, compared to 5.9 million pounds this time in 2016.

However, sales volume has only fallen one per cent from 9.3 million pounds last year to 9.2 million pounds this year.

Cameco also lowered production outlooks for the year from 25.2 million pounds to 24 million pounds, due to production delays at the Key Lake mine.

Cameco expects 2017 net earnings to be weaker than in 2016, but Gitzel said they continue to generate solid cash flows and expect them to exceed the $312 million reported in 2016 despite weaker earnings.

 

 

 

Which industry best creates wealth and reduces poverty in Canada? Resources (as usual)

Which industry best creates wealth and reduces poverty in Canada? Resources (as usual)

Mark Milke: What’s in the ground helped produce a dramatic increase in living standards over the last decade

Special to Financial Post

October 24, 2017
7:30 AM EDT

oil project

With the recent cancellation of TransCanada’s Energy East pipeline — after the company spent $1 billion in attempts to jump through ever-changing regulatory and political hoops — it is time to remind ourselves as Canadians where much of our country’s recent economic uptick originated.

Answer: In resource exploration and extraction.

This was illustrated again recently, just before the TransCanada announcement, with Statistics Canada’s recent release of key census data. The data revealed how median Canadian household income rose to $70,336 by 2015, up almost $6,900 from $63,457 in 2005 or nearly 11 per cent.

The provincial breakdowns are even more revealing than the national figure. Median income went up by $20,161 in Saskatchewan (37 per cent), $18,151 in Alberta (20 per cent) and $15,068 in Newfoundland and Labrador (29 per cent).

In contrast to these booming provinces, manufacturing in Central Canada took a hit

As Statistics Canada noted, “An important factor in the economic story of Canada over the decade was high resource prices.” The agency further observed how “that drew investment and people to Alberta, Saskatchewan and Newfoundland and Labrador, boosted the construction sector, and more generally filtered through the economy as a whole.”

In contrast to these booming provinces, manufacturing in Central Canada took a hit. Incomes there barely rose: Quebec saw a modest $4,901 rise (8.9 per cent) and Ontario was a national laggard with incomes increasing by a paltry $2,753 between 2005 and 2015 (only 3.8 per cent higher).

Which is where a caveat should be added to the Statistics Canada commentary that “high resource prices” explain significantly increased incomes. High resource prices — be they for oil, gas, lumber or minerals — help, but only if a province or region allows its resources to be explored, extracted and then shipped to market.

The Maritimes mostly sat out the boom in resource prices

The Maritimes mostly sat out the boom in resource prices because, for example, Nova Scotia and New Brunswick banned onshore exploration and extraction of natural gas. That was unlike Saskatchewan, Alberta and northern British Columbia.

Unsurprising then, New Brunswick’s median income in 2015 was $59,347, the lowest among all provinces. It did record 15-per-cent growth over the decade, but that statistic looks less impressive given New Brunswick’s low point in 2005 and its still-lowest ranking today. As a comparison, New Brunswick’s median income in 2015 was almost $8,000 lower than in Newfoundland and Labrador, where incomes soared by almost double that of New Brunswick. A lack of private sector investment in a profitable energy resource sector will do that.

Quebec provides other examples, both of foregone opportunities and the potential for income growth, when governments say “oui” to Canada’s comparative advantage in resources instead of “non.”

Quebec missed much of the benefit of higher resource prices because of political opposition to oil and gas

Quebec missed much of the benefit of higher resource prices because of some local and political opposition to oil and gas development. But of note, when the resource sector was allowed to thrive in Quebec, it did. As Statistics Canada observed “several metropolitan areas in resource rich areas had relatively higher income growth.” They include Rouyn-Noranda (+20.4 per cent), Val D’or (+18.0 per cent) and Sept-Îles (+13.4 per cent). That’s more “green” in the pockets of workers.

The lesson should be obvious: One comparative economic advantage for Canada is in natural resources. And this matters not just for faster-growing median incomes but also for drops in poverty. For example, resource-friendly Newfoundland saw the St. John’s low-income rate fall to 12 per cent from 16 per cent. Saskatoon’s low-income rate fell to 11.7 per cent from 15.2 per cent.

In contrast, Ontario, affected by the loss of 300,000 manufacturing jobs, recorded dramatic increases in poverty rates. That includes London (where low-income rates rose to 17 per cent by 2015 from 13.3 per cent in 2005) and Windsor (up to 17.5 per cent from 14 per cent).

It is clear from the data that resources are a critical driver of employment and incomes

Some people would still respond to all this with the old line that Canadians should seek to be more than “hewers of wood and drawers of water” (a phrase that wrongly depicts the forestry and hydro sectors as backward). That notion makes little sense because Canadians can and do invent, run and expand businesses in every sector, from hi-tech, to green sectors to tourism and finance, in addition to resources. But it’s clear from the data that resources are a critical driver of employment and incomes in Canada.

Insofar as politicians overlook resource advantages and hobble the sector with endless, ever-changing regulation, they ignore how what’s in the ground helped produce a dramatic increase in Canada’s living standards over the last decade.

To belittle or even attack Canada’s comparative advantage in resources is to neglect the positive effect this sector has on Canadian living standards. Snubbing opportunities in developing natural resources comes at the expense of additional jobs and better incomes for the poor and the middle class.

Mark Milke is an author and energy analyst.

 

 

 

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