May 9 (Bloomberg) -- Cameco Corp., Canada’s largest uranium producer, said the industry will struggle for the next 18 months before prices recover.
“The next 18 months we see as being a very difficult period for the market,” Tim Gitzel, president and chief executive officer of Cameco, said in an interview in Swakopmund, Namibia yesterday, where he was attending the opening of a mine. “We continue to look to the future, the future is bright for nuclear energy.”
Uranium prices have slumped more than 57 percent since the March 2011 earthquake and tsunami that crippled Tokyo Electric Power Co.’s nuclear power plant. The disaster led to Japan suspending its fleet of reactors. Demand for the atomic fuel will eventually outstrip supply as Cameco, which is based in Saskatoon, Saskatchewan, focuses on the market’s long-term prospects, Gitzel said in February. Cameco’s stock has declined 2 percent this year in Toronto.
While the industry expects to have 93 new reactors come into operation over the next 10 years, in addition to the 435 currently operating, current prices of the nuclear fuel “makes the situation very difficult for producers,” the CEO said in Namibia on the sidelines of an event to mark the start of mining operations at China General Nuclear Power Holding Corp.’s Husab mine.
Husab will catapult the southwest African nation past Niger and Australia by 2017, making Namibia the third-largest uranium producer, Zheng Keping, the chief executive officer of CGN’s Namibian unit, said. The mine has the potential to produce 15 million pounds of uranium and plans to have 1 million tons of stockpiled ore ready for processing in 2015 before becoming fully operational by 2017, he said.
The mine aims to be a key supplier for Chinese nuclear power plants and will invest $2 billion in the project, 10 percent of which is owned by the Namibian government, Keping said.