Cameco

Last updated
Cameco Corporation
FormerlyCanadian Mining and Energy Corporation
Company type Public
Industry Mining, energy
Predecessors
Founded1988;36 years ago (1988)
Headquarters Saskatoon, Saskatchewan, Canada
Key people
Ian Bruce (Chairman)
Tim Gitzel (President & CEO)
Products Uranium, electricity
RevenueDecrease2.svg CA$1.475 billion (2021) [1]
Number of employees
3,300 (2010)
Website cameco.com

Cameco Corporation (formerly Canadian Mining and Energy Corporation) is the world's largest publicly traded uranium company, based in Saskatoon, Saskatchewan, Canada. [2] In 2015, it was the world's second largest uranium producer, accounting for 18% of world production. [3] [4]

Contents

History

The Canadian Mining and Energy Corporation was formed in 1988 by the merger and privatization of two Crown corporations: the federally owned Eldorado Nuclear Limited (known previously as Eldorado Mining and Refining Limited) and Saskatchewan-based Saskatchewan Mining Development Corporation (SMDC). The name was later shortened to "Cameco Corporation".

The new company was initially owned 62% by the provincial government and 38% by the federal government. The initial public offering (IPO) for 20% of the company was conducted in July, 1991. Government ownership of the company decreased over the next eleven years, with full privatization occurring in February, 2002.

In 1996, Cameco acquired Power Resources Inc., the largest uranium producer in the United States. This was followed in 1998 by the acquisition of Canadian-based Uranerz Exploration and Mining Limited and Uranerz U.S.A., Inc.

In 2008, Cameco purchased a 24% stake in Global Laser Enrichment (GLE), the exclusive licensee of the proprietary Separation of Isotopes by Laser Excitation (SILEX) technology developed by SILEX Systems Limited. GLE is developing this third-generation uranium enrichment technology. In 2021, Cameco and SILEX purchased GE-Hitachi's 76% stake in GLE, leaving Cameco with 49% of the company. [5]

In 2011, Cameco signed an agreement with Talvivaara Mining Company whereby Cameco would pay US$60 million to construct a uranium extraction circuit at the Talvivaara nickel-zinc mine in Sotkamo. Talvivaara would then pay back the initial construction costs in the form of uranium concentrate; once the initial costs were paid Cameco would continue to purchase the uranium concentrate at a pricing formula based on market price on the day of delivery. [6]

In 2012, it acquired a nuclear fuel intermediary, Nukem Energy. [7]

In 2016, Cameco suspended operations at its Rabbit Lake mine, due to low uranium prices. [8] In 2017, it suspended operations for at least 10 months at its McArthur River mine and Key Lake mill, [9] converting that to an indefinite shutdown in 2018 involving the layoff of about 700 staff. [10]

In October 2022, Cameco along with Brookfield Renewable Partners announced the acquisition of Westinghouse Electric Company in a US$7.9 billion deal including debt. Cameco will own a 49% interest in the company as part of the deal. [11] [2] The acquisition was completed in November 2023. [12]

Operations

Cameco operates uranium mines in North America and Kazakhstan, including McArthur River-Key Lake, the world's largest uranium producer, and Cigar Lake, the world's highest grade uranium mine, both in Saskatchewan. Other operations in Saskatchewan include a mine and mill at Rabbit Lake, currently in care and maintenance.

In the United States, Cameco operates uranium mines in the states of Nebraska and Wyoming through its US subsidiary Cameco Resources Inc. Cameco Resources was formed in 2007 through a restructuring of two wholly owned subsidiaries, Power Resources Inc. (Wyoming) and Crow Butte Resources, Inc. (Nebraska).

In the province of Ontario, Cameco operates a uranium refinery in Blind River and a uranium conversion facility in Port Hope, which has faced opposition from some community groups. [13] [14] Cameco is the exclusive fuel supplier to Bruce Power, which supplies 30% of Ontario's electricity through its nuclear generating plant. [15] It used to own part of Bruce Power, but it sold its interest in 2014. [16]

In 2004, Cameco spun off its gold mining operations in Kyrgyzstan, Mongolia and the USA to a newly formed public company, Centerra Gold. Cameco divested its remaining interest in Centerra on December 30, 2009. [17]

In January 2011, Cameco participated in the clean up of a ship-board uranium concentrate spill on the MCP Altona that had occurred on December 23, 2010. [18]

Mines
Producing
NameLocation
Smith Ranch-Highland Wyoming, United States
Cigar Lake Saskatchewan, Canada
Crow Butte Nebraska, United States
Inkai Kazakhstan
McArthur River Saskatchewan, Canada
Suspended
Eagle Point (Rabbit Lake) Saskatchewan, Canada
Mills
NameLocation
Key Lake Saskatchewan, Canada
Rabbit Lake Saskatchewan, Canada
Fuel Production
NameLocation
Port Hope conversion facility Ontario, Canada
Blind River refinery Ontario, Canada

Tax Dodging Dispute

The Canadian Revenue Agency (CRA) claimed Cameco's tax scheme started in 1999. Cameco created a marketing subsidiary in Zug, Switzerland, and drafted a 17-year agreement to supply uranium to the Swiss subsidiary at a rate of $10 a pound. The corporate tax rate in Switzerland is estimated to be at around 10 per cent. The Canadian corporate rate estimated to be at least 27 per cent. [19] By having the Swiss subsidiary purchase the uranium first, and then selling it elsewhere, Cameco was able to pay the Canadian tax rate for the first $10 and the remainder at the Swiss tax rate.

In 2012, the Canadian research firm Veritas Investment Research estimated that Cameco paid $36 million in cash taxes on $680 million pre-tax cash flow from operations, or at a rate of 5 per cent. During the previous six-year period, the Swiss subsidiary claimed $4.3 billion in profits, while its Canadian operation claimed a loss of $1.3 billion. Cameco had also established another subsidiary in Barbados, a known tax haven. The operations conducted in this subsidiary were not clear, but court documents showed Cameco paid the Barbados subsidiary 50 per cent of its Swiss subsidiary's pre-tax profits in 2005. [20]

The CRA claimed that the Swiss subsidiary profits had to be taxed at Canadian rates, because these subsidiaries did not carry out any real business activities and were just paper companies. It wanted Cameco to pay $2.1 billion in back taxes. Cameco argued that its offshore structures were legitimate and permitted by Canadian tax laws. [20]

In 2018, a judge from the Tax Court of Canada, as well 3 judges from the Federal Court of Appeal ruled in Cameco's favour and found the manner it acted in to be lawful. [21] [22] The Tax Court also awarded the company with $10.25 million in legal fees and up to $17.9 million in disbursements for costs incurred. The CRA looked for a final appeal from the Supreme Court of Canada, but on February 18, 2021, the court rejected the appeal. [23] It upheld the ruling from the previous judges, and this left the CRA with no further means to pursue this case.

See also

Related Research Articles

Westinghouse Electric Company LLC is an American nuclear power company formed in 1999 from the nuclear power division of the original Westinghouse Electric Corporation. It offers nuclear products and services to utilities internationally, including nuclear fuel, service and maintenance, instrumentation, control and design of nuclear power plants. Westinghouse's world headquarters are located in the Pittsburgh suburb of Cranberry Township, Pennsylvania. Brookfield Renewable Partners, a Canadian private equity fund and a subsidiary of Brookfield Asset Management is the majority owner of Westinghouse.

Eldorado Resources was a Canadian mining company active between 1926 and 1988. The company was originally established by brothers Charles and Gilbert LaBine as a gold mining enterprise in 1926, but transitioned to focus on radium in the 1930s and uranium beginning in the 1940s. The company was nationalized into a Crown corporation in 1943 when the Canadian federal government purchased share control. Eldorado Resources was merged with the Saskatchewan Mining Development Corporation in 1988 and the resulting entity was privatized as Cameco Corporation. The remediation of some mining sites and low-level nuclear waste continue to be overseen by the Government of Canada through Canada Eldor Inc., a subsidiary of the Canada Development Investment Corporation.

Molecular laser isotope separation (MLIS) is a method of isotope separation, where specially tuned lasers are used to separate isotopes of uranium using selective ionization of hyperfine transitions of uranium hexafluoride molecules. It is similar to AVLIS. Its main advantage over AVLIS is low energy consumption and use of uranium hexafluoride instead of vaporized uranium.

Nuclear power in Canada is provided by 19 commercial reactors with a net capacity of 13.5 gigawatt (GW), producing a total of 95.6 terawatt-hours (TWh) of electricity, which accounted for 16.6% of the country's total electric energy generation in 2015. All but one of these reactors are located in Ontario, where they produced 61% of the province's electricity in 2019. Seven smaller reactors are used for research and to produce radiopharmaceuticals for use in nuclear medicine.

Gerald W. (Jerry) Grandey is a Canadian executive who was previously the President and Chief Executive Officer of Cameco Corporation, one of the world's largest uranium producers. He joined Cameco in 1993 as Senior Vice President, and was appointed President in 2000 and CEO in 2003. In 2010, The Harvard Business Review recognized him as being one of the top 100 CEOs in the world because of the value created for shareholders during his tenure. Grandey retired from Cameco in 2011.

Separation of isotopes by laser excitation (SILEX) is a process under development to enrich uranium on an industrial scale for nuclear reactors. It is strongly suspected that it utilizes laser condensation repression to excite the uranium-235 isotope in uranium hexafluoride (UF6), allowing this lighter molecule to move more rapidly to the outer rim of a gaseous jet and resist condensing compared to the heavier, unexcited 238UF6. This differs greatly from previous methods of laser enrichment explored for their commercial prospects: one using atomic uranium (Atomic Vapor Laser Isotope Separation (AVLIS)) and another molecular method that uses lasers to dissociate a fluorine atom from 235UF6 (Molecular Laser Isotope Separation (MLIS)), allowing the enriched product to precipitate out as a solid.

<span class="mw-page-title-main">Uranium mining</span> Process of extraction of uranium ore from the ground

Uranium mining is the process of extraction of uranium ore from the ground. Over 50 thousand tons of uranium were produced in 2019. Kazakhstan, Canada, and Australia were the top three uranium producers, respectively, and together account for 68% of world production. Other countries producing more than 1,000 tons per year included Namibia, Niger, Russia, Uzbekistan, the United States, and China. Nearly all of the world's mined uranium is used to power nuclear power plants. Historically uranium was also used in applications such as uranium glass or ferrouranium but those applications have declined due to the radioactivity of uranium and are nowadays mostly supplied with a plentiful cheap supply of depleted uranium which is also used in uranium ammunition. In addition to being cheaper, depleted uranium is also less radioactive due to a lower content of short-lived 234
U
and 235
U
than natural uranium.

The McArthur River Uranium Mine, in northern Saskatchewan, Canada, is the world's largest high-grade uranium deposit.

The Key Lake mine is a former uranium mine in Saskatchewan, Canada. It is 570 kilometres (350 mi) north of Saskatoon by air on the southern rim of the uranium-rich Athabasca Basin. Key Lake was initially developed to open-pit mine two nearby uranium ore deposits: the Gaertner deposit and the Deilmann deposit. Mining of this ore ceased in the late 1990s; the Key Lake mill now processes uranium ore from the McArthur River mine and from existing stockpiles on site. High-grade ore from McArthur river is blended with lower grade local rock before being passed through the mill. The mill has a permitted annual production capacity of 25 million pounds of U3O8. In addition, ammonium sulfate fertilizer is produced as a byproduct from used reagents. The pits of the mined out local deposits are being used as mill tailings management facilities.

Rabbit Lake is the second largest uranium milling facility in the western world, and is the longest-operating uranium production facility in Saskatchewan. The facility is located approximately 800 km north of Saskatoon, Saskatchewan, on the northeast edge of the uranium rich Athabasca Basin. The closest community is Wollaston Lake, about 40 kilometers by lake or air. Rabbit Lake was the first Canadian mine to offer a seven-days-in/seven-days-out commuter system of staffing. Access is provided by Highway 905. Production at Rabbit Lake was suspended in April 2016.

<span class="mw-page-title-main">Denison Mines</span> Canadian mining company

Denison Mines Corp. is a Canadian uranium exploration, development, and production company. Founded by Stephen B. Roman, and best known for its uranium mining in Blind River and Elliot Lake, it later diversified into coal, potash, and other projects.

<span class="mw-page-title-main">Kazatomprom</span> Uranium producer

National Atomic Company Kazatomprom Joint Stock Company (Kazatomprom) (Kazakh: Қазатомөнеркәсіп, romanized: Qazatomónerkásip) is the world’s largest producer and seller of natural uranium, providing over 40% of global primary uranium supply in 2019 from its operations in Kazakhstan. Kazatomprom's uranium is used for the generation of nuclear power around the world.

<span class="mw-page-title-main">Centerra Gold</span> Canadian mining company

Centerra Gold Inc. is a Canadian mining company that owns and operates the Mount Milligan copper-gold mine in British Columbia, Canada, and the Öksüt gold mine in Turkey. Through its Thompson Creek Metals subsidiary company, it also owns the Endako and Thompson Creek molybdenum mines in British Columbia and Idaho, respectively, though they have been inactive since Centerra's acquisition. The company formerly owned and operated the Kumtor Gold Mine in the Kyrgyz Republic and the Boroo Gold Mine in Mongolia. Headquartered in Toronto, Centerra Gold is a public company with shares traded on the Toronto Stock Exchange and New York Stock Exchange.

<span class="mw-page-title-main">Cigar Lake mine</span> Uranium mine in Saskatchewan, Canada

The Cigar Lake Mine is a large high-grade underground uranium mine, located in the uranium-rich Athabasca Basin of northern Saskatchewan, Canada, at the south-west corner of Waterbury Lake. The deposit, discovered in 1981, is second in size of high-grade deposits only to the nearby McArthur River mine. Other deposits, such as Olympic Dam in Australia, contain more uranium but at lower grades.

<span class="mw-page-title-main">Crow Butte</span> Uranium mine in Nebraska, United States

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<span class="mw-page-title-main">Uranium mining in Canada</span> Uranium mining in Canada

Canada is the world's second-largest producer of uranium, behind Kazakhstan. In 2009, 20% of the world's primary uranium production came from mines in Canada. 14.5% of the world production came from one mine, McArthur River. Currently, the only producing area in Canada is northern Saskatchewan, although other areas have had active mines in the past.

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The Beaverlodge Mine sometimes referred to as the Eldorado Mine or the Beaverlodge Operation was a uranium mine in the community of Eldorado, northern Saskatchewan, Canada. Eldorado was a small community 7 kilometres (4.3 mi) east of the community of Uranium City, Saskatchewan in the Beaverlodge Uranium District built by Eldorado Mining and Refining Limited to house the workforce and families of the mine.

The Kintyre uranium project is located 60 km south of the Telfer gold mine and 260 km northeast of Newman at the western edge of the Great Sandy Desert in the East Pilbara region of Western Australia.

References

  1. "Annual Report 2021" (PDF). p. 32. Retrieved 2023-01-18.
  2. 1 2 Hardison, Kathryn (11 October 2022). "Cameco, Brookfield Renewable Partners to Buy Westinghouse Electric for $7.88 Billion". The Wall Street Journal .
  3. "2015 Annual Report". Cameco Corporation. Retrieved 15 November 2016.
  4. "World Uranium Mining". World Nuclear Association. May 2015. Archived from the original on 2014-06-13. Retrieved 2016-04-26.
  5. "Our History - Global Laser Enrichment". Global Laser Enrichment. Retrieved 2022-09-14.
  6. "Cameco logs net earnings of $207 million in Q4 on $673 in revenue". Canadian Press. Retrieved 2011-02-12.[ permanent dead link ]
  7. "Cameco to buy Nukem Energy". World Nuclear News . 2012-05-14. Retrieved 2012-05-15.
  8. "Cameco Rallies on View Shutting Mine Will Bolster Uranium Prices". Bloomberg.com. 2016-04-22. Retrieved 2017-12-29.
  9. "'There was no indication this was going to happen': Union says workers shocked by temporary shutdowns and layoffs at Cameco uranium operations". Saskatoon StarPhoenix. 2017-11-09. Retrieved 2017-12-29.
  10. "Cameco shutdown extended indefinitely". World Nuclear News. 26 July 2018. Retrieved 28 July 2018.
  11. Deka, Kannaki; Kumar, Arunima (11 October 2022). "Westinghouse to be sold in $7.9-bln deal as interest in nuclear power grows". Reuters .
  12. "Westinghouse Acquisition by Brookfield and Cameco Complete". 7 November 2023.
  13. Port Hope Community Health Concerns Committee Archived 2012-03-17 at the Wayback Machine
  14. Port Hope Families Against Radiation Exposure Archived 2009-02-06 at the Wayback Machine
  15. "Cameco enters $2B deal with Ontario's Bruce Power". CBC News. Retrieved 2017-12-29.
  16. "Cameco to sell stake in Bruce Power nuclear partnership to Borealis for $450M". Global News. Retrieved 2017-12-29.
  17. "Cameco Announces Completion of Centerra Common Share Sale". Archived from the original on 2010-02-25. Retrieved 2010-02-01.
  18. "UPDATE Jan. 24: Uranium ship out of Stuart Channel". Ladysmith Chemainus Chronicle. 2011-01-18. Retrieved 2021-10-26.
  19. Leo, Geoff (September 19, 2013). "Ottawa accuses Cameco of multi-million dollar tax dodge | CBC News". CBC News . Retrieved 2023-04-21.
  20. 1 2 Livesey, Bruce (2016-04-25). "Did this company engineer the largest tax dodge in Canadian history?". Canada's National Observer. Retrieved 2023-04-21.
  21. "Federal Court of Appeal has upheld Tax Court ruling challenged by CRA: Cameco | Globalnews.ca". Global News. Retrieved 2023-04-21.
  22. "Ruling in Cameco tax case tied to sale of Russian uranium puts billions at stake, CRA says". financialpost. Retrieved 2023-04-21.
  23. "Key takeaways from Supreme Court's termination of Cameco transfer pricing saga". BLG. Retrieved 2023-04-21.