Category Archives: uranium and nuclear
Infographic: Where Canada sits in the global spectrum of energy development
By Darrell Stonehouse
Feb. 2, 2017, 2:38 p.m.
In Natural Resources Canada’s latest Energy Fact Book, the government department ranks Canada against other nations in the world in a number of energy industries.
This includes crude oil, natural gas, coal, uranium, renewables and electricity—based on proved reserve or capacity, production and exports in 2015.
Here’s how Canada stacks up.
Cameco to fight Tokyo Electric on cancellation of $1.3-billion contract
Published Wednesday, Feb. 01, 2017 8:33AM EST
Last updated Wednesday, Feb. 01, 2017 9:11AM EST
Canadian uranium producer Cameco Corp said on Wednesday that Tokyo Electric Power (Tepco) , the operator of Japan’s wrecked Fukushima nuclear plant, had scrapped its uranium supply contract with the company.
Cameco, one of the world’s largest uranium producers, said it considered Tepco’s move to terminate the contract unfair and that it would pursue legal action.
Cameco said Tepco cited a force majeure for ending the contract as it had been unable to operate its nuclear plants for 18 straight months due to Japanese regulations arising from the 2011 Fukushima nuclear accident.
The company said it was notified of the contract termination by Tepco last week.
Tepco’s move comes amid a fall in demand for uranium that is largely a result of the Fukushima nuclear plant meltdown, which led to shutdowns of all of Japan’s nuclear reactors.
Some reactors have since come back online, but global inventories of the radioactive metal remain high.
Cameco warned late last year that the uranium market would remain depressed until Japan’s nuclear reactors were restarted and excess supply was depleted.
Tepco’s termination of the contract would affect about 9.3 million pounds of uranium deliveries through 2028, worth about $1.3-billion in revenue to Cameco, the Saskatoon, Canada-based company said.
Cameco also said it expected 2017 revenue of $2.1-billion to $2.2-billion, inclusive of Tepco’s volume, adding that it could withstand any potential loss of revenue this year from the dispute.
Time to step up: resource sectors need Canada’s media more than ever
- Published on January 28, 2017
- President & CEO at JuneWarren-Nickle’s Energy Group
[Download the report HERE]
In this age of thought-leadership reports and white paper discussions that flutter around our lives like so much wedding confetti, there’s one document out there that deserves immediate attention – particularly in Canada’s resource sectors.
For those sectors read: energy, mining, forestry and agriculture – the industries that are the supporting vertebrae of Canada’s economic backbone.
The sectors everybody increasingly seems to want to despise.
Every senior management team and board of directors in companies that derive their livelihoods from those various sectors should make this particular report required strategic reading. It will give them profound insights into what happens when a business model collapses dramatically in a way that directly impacts their own businesses, especially in terms of public perception.
And it may guide them to proactively support the policy pushes necessary to bring back Canada’s media sector from the brink of extinction.
Entitled The Shattered Mirror, [Download the report HERE] it’s the product of research and consultation by the Public Policy Forum. It critically examines the state of Canadian media. The prognosis isn’t good. It paints a troubling picture of the diminished role Canadian media plays in mediating and shaping the discourses and narratives that define socioeconomic and political conversations. Commissioned by Heritage Canada, The Shattered Mirroris more than a casual query into how digital forces are battering a largely analogue sector. It probes deeply into the costs our democracy and civil society face when institutions like newspapers are abandoned in droves.
Unfortunately, most resource executives are predisposed to crap on media. And I mean crap, in every smelly and repugnant sense of the word. There’s no way to put it elegantly.
Indeed, “media” has been largely indicted by those same leaders for being part of, if not entirely responsible for, the poor public image resource sector executives and managers argue plague their respective industries.
What the resource sector “C-Suite” doesn’t get is that it has been in some measure responsible, even if unwittingly so, for silencing of the very voices whose now-diminished importance resulted in such horrible conditions of public perception. Each resource sector languishes under the burden of its own special version of “social licence…”
The mainstream media is partially to blame for its own problems, of course, but it’s challenging to do “the job” when your business can barely keep its head above water. In recent times, you would think resource companies would be more emphatic.
What those resource companies and media organizations share is a common burden: being considered increasingly irrelevant by a society which generally has no clue as to how relevant the products are to our daily lives.
But at a time when resource players should have been embracing media, they instead chose (largely) to adopt adversarial relations, thinking they could bypass reporters and editorial boards. In short, they thought they could become content creators themselves. What was missing is the ability to set trusted context.
There’s no free ride for context – and that’s what separates mere “content” from quality journalism.
It’s media context-setting that defines a progressive society’s means of processing issues of major importance. Those debates are not always pretty, of course, and they sometimes cause hurt feelings. But in most cases, they advance substantive issues to some form of resolution.
Put bluntly, Facebook does not give a rat’s ass about Canada’s oilsands industry, by way of one example. In fact, it’s quite the opposite, in that Facebook provides a curation-free platform for the voices which shout in opposition to energy development (or farming, or logging, or mining) with no burden of actually proving the merits (or facts) of their perspectives.
No judgment. No context. No facts.
Fake news was around long before Donald Trump made it a thing – and it was hitting hard at the country’s resource bases.
It’s a good bet that the editorial team at the Calgary Herald cares about oilsands development, though, because it cares about the way society works.
That doesn’t mean the sector is guaranteed a free ride in terms of fawning features. Constructive and consistent coverage and analysis makes companies and sectors better. If the Herald staff today what it was five years ago, the “coverage” would be more balanced, more deeply contextualized and more subtly nuanced. And we would have a better oilsands sector for it.
But every cancelled subscription and un-bought advertisement hobbles The Herald’s ability to be doing what it ought to: curating, coordinating and yes, even mediating.
But there’s another, more insidious, problem: strong (not social) media makes for a more literate public. And at a time when Joe Average Citizen needs to be learning about Canada’s resource challenges, the teacher is phoning in sick and there’s no substitute available.
There’s another millennial twist worth noting: too many resource companies fell over themselves establishing social media strategies at the behest of millennial communicators who promised that tweets and Facebook postings would bring Canadians around. In many cases, just the opposite happened. Corporate social media efforts were met with the opprobrium of a vocal few. In other words, what corporate (resource) Canada didn’t get is that when it comes to discussing something rationally social media is largely just a bullhorn for banality and bullshit. The problem is that people tend to believe social media because they distrust they way resource sector companies communicate.
Canada’s resource sectors are now firmly behind the eight ball in terms of public opinion. And the very media institutions that might have helped them turn the corner in public opinion are on life support.
Here’s betting the resource bosses are longing for the good old days when a reporter with a notepad showed up. That’s a lot simpler than dealing with the flow of Twitter dreck that seems to hypnotize the average Canadian the same way a rabbit hypnotizes a snake – before it gobbles the hapless creature whole.
As Joni Mitchell once crooned in Big Yellow Taxi, “…you don’t know what you got ’til it’s gone.”
- 20 Jan 2017
- Saskatoon StarPhoenix
- SUNNY FREEMAN Financial Post
Cameco bullish on uranium demand
But market still oversupplied
Facing this consensus view that exceeded our maintained core guidance and our disclosed other costs … we faced some choices.
Cameco Corp. is more optimistic about long-term demand for uranium than it has been for five years, a top executive said Thursday after the company’s stock price tumbled following an unusual warning it was too bullish on its 2016 performance.
The Saskatoon-based uranium miner took an extraordinary step Tuesday by issuing an announcement that analysts’ estimates for the company’s full-year results were too high. It said it expected to report a 2016 loss Feb. 9. The company’s share price lost about 10 per cent of its value on Wednesday, but recovered on Thursday, closing at $15.85, up 10.15 per cent on the day, on the Toronto Stock Exchange.
Grant Isaac, Cameco’s chief financial officer, told the TD Securities Mining Conference in Toronto that the company felt compelled to “correct what we felt was a misalignment in earnings expectations,” noting that restructuring costs from shuttered operations and legal costs associated with a tax dispute will weigh on its 2016 balance sheet.
“So, facing this consensus view that exceeded our maintained core guidance and our disclosed other costs … we faced some choices,” Isaac told the analysts’ conference, adding the company wanted to be transparent with the investment community.
“We were not going to sit with the investment community and discuss our positive forward outlook on the uranium market, remain silent on the misaligned earnings expectations and then fly back to Saskatoon and put out an earnings announcement that didn’t meet the Street.”
Cameco’s shares have risen some 50 per cent in the past three months as analysts foresaw the supply-demand economics tip into better balance — and even undersupply in the medium-term — amid renewed interest in the sector driven by production cutbacks and the potential for global nuclear energy growth. But even after recent production cuts, the market is still oversupplied and utilities will be covered until about 2022 when demand increases to the point it cannot be satisfied by existing supply, Isaac said.
The market has been oversupplied since demand dropped following the Fukushima nuclear accident of 2011, while Kazakhstan continued to raise output to maintain market dominance, causing further weakness in uranium prices. He believes customers are taking a “wait-and-see” approach as to whether Kazakhstan, the world’s top uranium producer, follows through on last week’s announcement that it will cut output by 10 per cent due to weak market conditions, sending uranium spot prices 10 per cent higher to around US$25 a pound the day after.
Some of Cameco’s customers have suggested they want to terminate current contracts negotiated when uranium prices were higher — as they are paying more than the spot price.
Cameco has two approaches on that front: For customers it believes hold a future potential, it is open to discussions about blending or extending the contract, while for those considered to be of little future value, it is willing to fight to keep the contracts in place.
TD analyst Greg Barnes said he realizes that he and many analysts did not model correctly for the one-time cost impacts in 2016, but he was taken by surprise that the company said it didn’t see the utilities markets responding to the Kazakh announcement.
“That is a positive development, it recognizes that we are in a uranium price that is not supportive of uranium production,” he said. “But ultimately what we haven’t seen is a real buy-in from fuel buyers … they don’t yet believe the Kazakhs.”
- 18 Jan 2017
- Saskatoon StarPhoenix
- ALEX MACPHERSON
Australia gives Cameco environmental approval to build uranium mine
Cameco Corp. is one step closer to building its proposed Yeelirrie uranium mine in Western Australia, after the state’s government overturned an Environmental Protection Authority (EPA) recommendation that the project be halted.
It remains unclear, however, when the Saskatoon-based company — which operates two mines in Saskatchewan and an in situ recovery operation in Kazakhstan — will build the multibillion-dollar open-pit mine, 650 kilometres northeast of Perth.
“We are advancing Yeelirrie through the environmental assessment process so that we are ready to respond when the market signals a need for more uranium,” managing director of Cameco’s Australian subsidy Brian Reilly said in a statement.
Global uranium markets have been in free fall since the 2011 Fukushima Daiichi disaster. Cameco has responded by cutting costs: Last year alone it shuttered one mine, reduced production at others and slashed about nine per cent of its corporate workforce.
While the company maintains that a recovery is on the horizon as nuclear plants under construction in China, India and Korea come online, it has said work on projects like Yeelirrie has been scaled back to align with “market signals.”
The EPA said in August that Cameco’s proposal — which, according to local media reports, has long been opposed by indigenous activists in the region — should not proceed because it could endanger underground animals known as stygofauna and troglofauna.
The state government said this week that it considered “broader economic and social” factors in its decision to overrule the EPA, and that if Cameco proceeds, it will do so under “strict conditions” to protect the environment.
“Cameco Australia is committed to minimizing environmental impacts from its operations while at the same time maximizing benefits for nearby communities and the state,” Reilly said in the statement.
Cameco bought the Yeelirrie project from the Anglo-Australian mining giant BHP Billiton for US$430 million in 2012. The Western Australian government said the mine will have operating and capital costs of around US$3.7 billion over its 18-year lifespan.
According to its corporate filings, Cameco must submit detailed construction and infrastructure plans for the mine to the Western Australian government by June 20, 2018, to retain the title to the property.
The Australian ruling comes the same day Cameco announced it plans to continue its cost-cutting program by eliminating about 120 jobs from its McArthur River, Cigar Lake and Key Lake operations in northern Saskatchewan beginning in April.
Cameco said the changes represent about 10 per cent of the workforce at its three major facilities in the province, and that the layoffs will be complete by the end of May.
Cameco falls after unveiling job cuts, warning analyst estimates are too high
TORONTO — The Canadian Press
Published Wednesday, Jan. 18, 2017 7:54AM EST
Last updated Wednesday, Jan. 18, 2017 7:55AM EST
Shares of Cameco Corp. have fallen 8.8 per cent in overnight trading after the Saskatoon-based uranium producer warned Tuesday that analyst estimates are too high and it expects to report a loss for 2016.
Cameco said the loss will reflect the reduced fair value of its assets because of a weak uranium market.
The company also said its adjusted net earnings would be significantly lower than analyst estimates.
Thomson Reuters data indicate analysts had estimated 86 cents per share of adjusted earnings and a net profit of 96 cents per share for the full year ended Dec. 31.
At 6:30 a.m. today, Cameco’s shares had fallen by $1.17 (U.S.) to $12.10 in overnight trading. The stock had recently shot up $2.52 from $10.75 per share on Jan. 9.
Cameco’s shares closed at $13.27 on Tuesday at the New York Stock Exchange and at $17.32 (Canadian) in Toronto.
The company also announced Tuesday that it expects to lay off 120 employees in stages as part of its plans to further reduce costs and improve efficiency at its struggling uranium mining operations. It expects to complete the layoffs by the end of May.
Cameco said the work force at the McArthur River, Key Lake and Cigar Lake operations will be reduced by approximately 10 per cent in total.
Private capital rotating into mining and metals
Jan 11, 2016
After four-plus years of declines, 2016 was a comeback year for natural resources and the oil and mining industries – with only a couple of exceptions, energy, metal and mineral prices rallied last year.
According to a new report by private capital tracker Preqin, the improving conditions of last year did not filter through to all sectors.
Overall fundraising for natural resources investment actually declined declined by a fifth in 2016 to the lowest since 2012.
Coming off a record 2015, 70 funds raised a total of $58bn for investment in natural resources in 2016 (a figure that could go higher as more information becomes available says Preqin).
In 2015 mining and metals made up a paltry 0.6% of funds raised
But mining and metals enjoyed a much better year. In 2015 mining and metals made up a paltry 0.6% of funds raised with just two funds closing on $400 million in 2015. Last year five funds managed to raise $2.1 billion.
That’s still small beer compared to the money going into oil and gas however. Of the top 10 largest natural resources funds that reached a final close in 2016, all 10 are focused on energy-related assets, and all but one focus on projects in the US.
Together, these 10 funds alone raised $38bn, two-thirds of all natural resources capital raised through the year according to the report. So called dry powder – money ready to be invested – for natural resources now total $173 billion. Dry powder destined for mining stood at around $7 billion last year.
In 2017, across natural resources 250 funds are look to raise just under $120 billion. Of those only 13 are primarily focused on metals and mining and are hoping to raise $10bn (although some of $2.9bn for diversified funds could go into mining). The biggest mining-focused fund is China’s Power Capital which is seeking $3bn to invest in Asia. Diversified US-based Energy and Minerals Group is looking for $4 billion.
Tom Carr, Preqin’s head of real assets products, says there is more diversity present among those funds that are currently in market: “In particular, large vehicles focused on
mining and agriculture may see these sectors account for a greater proportion of activity than in 2016.”
Private capital encompasses a range of investment vehicles and strategies including traditional private equity such as buyout, venture capital and turnaround funds, private debt including distressed debt and direct lending, and private real estate, infrastructure and natural resources funds.
A total of $602bn were raised by 1,228 funds across all strategies and sectors in 2016 according to Preqin data.
The petroleum and mining sectors should put their heads together for a good cause: their future
Published on January 15, 2017
President & CEO at JuneWarren-Nickle’s Energy Group
It’s interesting to watch two sectors that should be joined at the hip in defense of their joint futures and wonder why they’re not; at least not in any publicly or politically discernible way.
The beauty of my day job is this: I am privileged to be involved with two teams that provide essential information insights to Canada’s two most important resource sectors: energy and mining. The men and women associated with venerable business brands such as Oilweek, The Daily Oil Bulletin, The Northern Miner and Canadian Mining Journal provide context, analysis and intelligence insights to the diverse stakeholders that comprise the “energy” and “mining” sectors.
Collectively, the brands represent more than three centuries of sectoral service and have been binding tools through the diverse and complex (and often brutal) cycles through which these industries pass. The teams also provide research and analysis services, including insights into external forces that impact the sectors; thus the brands also afford a perspective on the things which have put energy and mining under fire.
Both sectors are under tremendous social and political assault, the roots of which have common origins in the increasingly binary ways many Canadians are thinking about the economy and the environment. Indeed, much of it has to do with a Canadian society more than ever disconnected from the realities of how Canada’s resource riches contribute to our standard of living.
Forget distinctions between hard rocks and soft rocks: let’s contemplate how two sectors working more collaboratively can tell Canadians more compelling and cogent stories. In the process, we help folks understand how far advanced these sectors are in terms of their environmental and social records; the things for which, paradoxically, they are most pilloried.
Take aboriginal action for example. A straw poll of ordinary Canadians would almost certainly produce the following predictable result: resource industries need to do way better by way of aboriginal communities. That’s because everyone reads the same headlines. Who gets the coverage? Communities negotiating through the mainstream media, of course. Those same communities have also effectively left footed politicians from all levels of government.
But both oil and gas and mining companies can point to pretty decent records of working with aboriginal communities and companies. But aside from occasional glossy advertising campaigns pointing this out (which are often too rose-colored to be credible) few people outside the sectors themselves realize this.
Instead, contrary mythologies are propagated and the norm becomes sectors too distant and uncaring to be bothered by the perceived sovereign, economic and environmental travails of aboriginal communities.
But consider the following quote from Fort McMurray #468 First Nation (FMFN) over the recent controversy sparked by Jane Fonda’s visit to Canada’s oilsands (although visit stretches the word’s semantically elasticity.) FMFN was trying to distance itself from the presence of a former councillor who appeared in photo with Fonda. After pointing out it had no part in the planning of the actor’s visit, FMFN had this to say:
“FMFN #468 does support responsible development of the oil sands, and is confident that our industry partners have the same vision. We have strong partnerships with many companies, and we are grateful for these partners for the significant role they have played in our efforts since 2011 to establish FMFN as a strong, economically self-sufficient First Nation.”
There are myriad sentiments like this from aboriginal communities across Canada. But they’re not headline fodder, nor are they simple for stretched journalists to contextualize. Most mainstream media outlets are so busy these days chasing their own social media tails that consequential journalism has fallen by the wayside.
And, for ordinary citizens in any case, labels like “inconvenient truths” are more emotively satisfying than things like “convenient realities”.
In the context of aboriginal communities described above, the oilsands sector is a good example, because such communities benefit from both mining and oil and gas activities and provide a suitable backdrop against which to consider better and more balanced storytelling that demonstrates what is real and what is possible.
But here’s a reality: both sectors are in states of profound flux and there’s growing realization that one transformative force is the new energy era into which we have embarked.
Given what we know will be required to support next-generation renewable energy infrastructure, much of it to be sourced from various mined resources (think lithium and other rare earth elements), it seems at least some stars are aligning for the sectors to begin chatting more strategically.
Many oil and gas companies are already making their own bold moves into alternative energy systems investments.
Perhaps the dawning of a new energy era will provide sufficient catalysts for the sectors to contemplate how they’re stronger together.
Other countries see Canada as an energy leader—so should you
By Bill Whitelaw
Jan. 9, 2017, 1:41 p.m.
Canadians pondering our energy future might do well to take into account how others see us.
It would give them comfort to know the sector is actually in pretty good hands—at least in the opinion of folks able to view things from a rational perspective.
As Canada celebrates its 150th anniversary, it’s important to remember that our energy sector’s roots actually predate Confederation.
For a relatively young country, we have an old (and honourable) energy history. But because we live with it daily, we’re perhaps not as acutely aware of how important that energy history is when rooted in a global context and viewed from the vantage points of other jurisdictions that see Canada as an international role model.
Simply put, for many folks outside of Canada, the things we as Canadians take for granted in terms of energy development are looked upon with something that borders on envy.
Canadians would do well as energy citizens to see—as others do—our energy record as something to be viewed with pride rather than disdain or even despair.
Those who believe mainstream media coverage might be tempted to believe that the Canadian energy record blots an otherwise sterling international reputation.
That’s because a small group of activist voices seem to exert a command-and-control dynamic over Canada’s news editors who (generally) are more caught up chasing the social media mewlings of activists rather than engaging in solid, contextual and literate energy journalism.
Talk to the men and women in other countries who are in charge of domestic energy development and an entirely different view of Canada’s competencies emerges.
Canada’s energy ethos
What’s the common linkage between Canada’s diverse capabilities? A unique characteristic perhaps best described as an energy ethos—ethos being the operative word.
Put simply, it’s the ethical approach Canadians take to energy development: one that keeps in balance environmental dynamics and economic realities.
On a recent energy tour of central European countries—Poland, Hungary and Croatia—discussions with a diverse range of energy stakeholders provided interesting perspectives on what Canada has to offer in terms of technical, safety, regulatory, educational and yes, even political experience and practice.
The tour was organized by Ottawa’s trade commissioner to showcase and heighten opportunities in both Canadian investment and trade.
Canada is an attractive trading partner and supplier of expertise, perspective and social conscience because of where we have evolved to in our domestic energy dynamic.
Energy “freedoms” are a major difference between our approach and the approach of others. Take our system’s transparency as but one example.
Most Canadians are largely ignorant of the transparency foundations on which our energy systems are built—foundations that contribute immeasurably to our quality of life.
Want to know what a energy company paid to lease Crown land? No problem. Interested in knowing who was issued a well licence yesterday? Again, no problem. Curious about a particular company’s hydrocarbon production volumes? Easy, peasy.
It’s all there in the public domain—and it makes for an incredibly vibrant and competitive industry. Such data availability to anyone with an interest is core to how many of our systems function, not for oil and gas companies or power generators in particular but for Canadian society as a whole.
That’s one dimension the Poles, Hungarians and Croatians deeply admire.
Why? Because the system works for the citizens who actually own the molecules.
And that system—actually a system of systems, provincially and federally—has been evolving and improving over decades. Data transparency actually creates robust, competitive and accountable markets.
Balancing energy and the environment
The ways and means we’re balancing energy development and environmental sustainability are also of great interest, as are the methods for consultation on major energy issues.
Canadians—again, those who only consume mainstream media—might be confused by this given all the white noise around perceived failures to consult around major pipeline projects. But citizens of central Europe would give their eyeteeth to be privileged to avail themselves of our processes.
The other area drawing attention is the way in which Canada is advancing its energy-systems mix; the balanced approach that recognizes no single energy system can be wholly independent in and of itself.
Whether this is driven by regulation or the market, Canada’s approach is eyed as a form of guidance as our country navigates the best way to use its vast and varied resource wealth.
One of the main drivers of central European interest in Canadian energy turns on a dynamic unknown to Canadians: being dependent on a less-than-dependable source for the bulk of domestic energy demand.
In this case, the 12 countries that form central Europe want to be less reliant on Russian natural gas from both pricing and security of supply perspectives. They’re making a variety of moves, independently and through the European Union, to become more energy self-sufficient as well as wean themselves off coal over the long-term.
Canada’s energy shift is about new market opportunities for our hydrocarbons and the products and services that drive their development across a broad supply chain spectrum.
The race with no finish line
This is not to suggest, of course, that Canada should rest on its laurels simply because others admire our systems and approaches. In fact, it’s a pointed reminder that being an energy leader comes with the burden of running a race that has no finish line.
But it is nice to know we’re well ahead of a large part of the pack.
It’s too bad more Canadians can’t see what’s in front of them.
The video interview is below.