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Martu Traditional Owners 140 km walk protesting against Cameco's Kintyre uranium mine, WA. (Photo by Tobias Titz, tobiastitz.de.)

Multinational uranium producer Cameco is battling a uranium downturn, the tax office, disinterested customers and Traditional Owners, Dr Jim Green reports. 

ECONOMICS is killing the nuclear power industry.

Westinghouse, a giant of the industry, recently filed for bankruptcy protection and its parent company Toshiba may also go bankrupt — both companies brought undone by $15 billion cost overruns building four reactors.

In France, nuclear utilities EDF and Areva would have gone bankrupt if not for repeated multi-billion-dollar government bailouts — their most immediate problem is cost overruns of $18 billion building just two reactors.

The question arises: will them nuclear power crisis create similar carnage in the uranium industry? Might it bring down a uranium industry giant like Cameco, which provides about 17% of the world's production from mines in Canada, the U.S. and Kazakhstan?

The short answer is that Cameco will likely survive, but the company has been downsizing continuously for the past five years:

Another 120 workers are to be sacked by May 2017 at three Canadian uranium mines ‒ McArthur River, Key Lake and Cigar Lake ‒ and production at McArthur River, already reduced, will be suspended for six weeks in mid-2017.

Cameco's revenue dropped US$238 million (AU$321 million) in 2016 and the company posted a US$46 million (AU$62 million) loss for the year. The loss was largely the result of US$267 million (AU$360 million) in impairment charges, including US$91 million (AU$123 million) related to the Rabbit Lake mine and a write-off of the full US$176 million (AU$237 million) value of the Kintyre uranium project in Western Australia.

President Tim Gitzel said:

"I think it's fair to say that no one, including me, by the way, expected the market would go this low and for this long ... market conditions in 2016 were as tough as I have seen them in 30 years."

Cameco's "tier-1" mines ‒ McArthur River and Cigar Lake in Canada and the Inkai ISL mine in Kazakhstan ‒ have been largely unaffected by the cutbacks except for the slowdown at McArthur River. But the tier-1 mines aren't safe, Cameco plans to reduce production by 7% in 2017, the two mines in the U.S. might be sold (if a buyer can be found), and new mines are off the table.

TEPCO cancels billion-dollar contract

Cameco faces a new problem with notorious Japanese company TEPCO ‒ owner of the Fukushima reactors ‒ announcing on January 24 that it had issued a contract termination notice, sparking a 15% drop in Cameco's share price over the next two days. The termination affects about 9.3 million pounds (4.22 kilos) of uranium oxide due to be delivered until 2028, worth approximately US$959 million (AU$1294 million).

TEPCO argues that a "force majeure" event occurred because it has been unable to operate its nuclear plants in Japan ‒ four reactors at Fukushima Daini and seven reactors at Kashiwazaki Kariwa ‒ for some years due to government regulations relating to reactor restarts in the aftermath of the March 2011 Fukushima disaster.

Cameco plans to fight the contract termination and will pursue "all its legal rights and remedies".

Gitzel said:

'They've taken delivery under this contract in 2014, 2015 and 2016, so we're a bit perplexed as to why now all of a sudden they think there's a case of, as they say, "force majeure".' 

TEPCO has received and paid for 2.2 million pounds of uranium oxide from Cameco since 2014.

Japan is "swimming – some would say drowning – in uranium", the senior editor of Platts Nuclear Publications said in early 2016. According to Forbes writer James Conca, Japan's existing uranium inventory will suffice to fuel the country's power reactors "for the next decade".

Nick Carter from Ux Consulting said he believes TEPCO is the first Japanese utility to terminate a long-term contract, while many others have tried to renegotiate contracts to reduce volumes or prices or delay shipments. Gitzel acknowledged that "there is concern over the risk of contagion from the TEPCO announcement" ‒ more customers might try to cancel contracts if TEPCO succeeds.

Tax dispute

A long-running tax dispute is starting to heat up with the October 2016 commencement of a court case brought against Cameco by the Canada Revenue Agency (CRA). The dispute has been slowly winding its way through appeals and legal motions since 2009 when Cameco first challenged the CRA's findings. The court case is likely to conclude in the coming months but the court's decision may not be finalised until late-2017 or 2018.

Cameco is accused of setting up a subsidiary in Switzerland and selling it uranium at a low price to avoid tax. Thus Cameco was paying the Swiss tax rate of about 10% compared to almost 30% in Canada. Cameco set up the subsidiary in 1999 and established a 17-year deal selling uranium at approximately US$10 (AU$13.50) a pound — far less than the average price over the 17-years period. Another subsidiary was established in Barbados — possibly to repatriate offshore profits.

If Cameco loses the case in the Tax Court of Canada, it could be liable for back taxes of US$1.6 billion (AU$2.2 billion). Last year, the company spent approximately US$89 million (AU$120 million) legal costs related to the tax dispute.

Canadians for Tax Fairness have been arguing the case for legislative change to stop profit-shifting schemes, and for Cameco to pay up. Last year, the NGO teamed up with Saskatchewan Citizens for Tax Fairness and the international corporate watchdog, SumOfUs, to deliver a petition with 35,000 signatures to the Canadian Prime Minister's office and to Cameco's executive offices.

Don Kossick from Canadians for Tax Fairness noted that the US$1.6 billion (AU$2.2 billion) could easily cover the budgetary deficit in Saskatchewan that has resulted in major cuts to health, education and human services.

Cameco's uranium deposits in Western Australia

Walkatjurra Walkabout against Cameco's Yeelirrie uranium mine, Wangkatja country, Western Australia, 2016. (Image courtesy Friends of the Earth.)

Kintyre (70% Cameco/30% Mitsubishi)

The Martu people have fought against this proposed uranium mine since the 1980s. The deposit sits between two branches of a creek called Yantikutji, which is connected to a complex network of surface and groundwater systems. It is also in an area that was cut out of the Karlamilyi National Park, WA's biggest National Park. Kintyre is home to 28 rare, endangered and threatened species. The project would include an open pit 1.5 km long, 1.5 km wide, it would use 3.5 million litres of water a day and leave behind 7.2 million tonnes of radioactive mine waste over the life of the project.

In June 2016, Martu Traditional Owners led a 140 km, week-long walk to protest against Cameco's proposed uranium mine at Kintyre. Aboriginal Traditional Owners are concerned the project will affect their water supplies as well as 28 threatened species in the Karlamilyi National Park.

Joining the protest walk was Anohni, the Academy Award-nominated musician from Antony and the Johnsons.

Anohni said:

It's a huge — it's a really majestic place. It's really hard to put a finger on it but there's a sense of presence and integrity and patience, dignity and perseverance and intense intuitive wisdom that this particular community of people have. There is almost an unbroken connection to the land — they haven't been radically disrupted. They are very impressive people — it's humbling to be around these women. In many regards, I think the guys who run Cameco are desolate souls, desolate souls with no home, with no connection to land, with no connection to country.

Yeelirrie (100% Cameco)

Yeelirrie in the local Wongutha Aboriginal language means "place of death". The local community has fought against mining at Yeelirrie for over 40 years. There was a trial mine in the 1970s, which was poorly managed: the site was abandoned, unfenced and unsigned with a shallow open pit and tailings left behind. The project would include a nine kilometre long, one kilometre wide open pit, it would use 8.7 million litres of water a day and leave behind 36 million tonnes of radioactive mine waste over the life of the mine.

There are many cultural heritage sites under threat from this proposal. The project was rejected by the Western Australian Environmental Protection Agency in 2016 because of the threat that 11 species of underground microfauna would become extinct. The WA Environment Minister ignored the EPA advice and approved the project anyway.

Dr Jim Green is the national nuclear campaigner with Friends of the Earth, Australia and editor of the Nuclear Monitor newsletter published by the World Information Service on Energy. You can follow Jim on Twitter @jimgreen333.

The next Walkatjurra Walkabout will begin in August 2017 Visit walkingforcountry.com for details. 

CAMECO'S INCIDENTS AND ACCIDENTS: 1981‒2016

This table lists many of Cameco's accidents and controversies since 1981 — leaks and spills, the promotion of dangerous radiation junk science (in WA and elsewhere) appalling treatment of Indigenous people, systemic and sometimes deliberate safety failures and so on.

Date and Location

Description of Incident

1981−89:

Saskatchewan, Canada

153 spills occurred at three uranium mines in Saskatchewan from 1981 to 1989. Cameco was fined C$10,000 for negligence in relation to a 1989 spill of two million litres of radium- and arsenic-contaminated water from the Rabbit Lake mine.

1990, May 13:

Blind River Uranium Refinery

Leak shuts down the Canadian refinery. Approximately 178 kg of radioactive uranium dust leaked into the air over a 30-hour period.

1993:

Canada/US

Inter-Church Uranium Committee from Saskatchewan reveals export of at least 500 tons of depleted uranium to the US military by Cameco, despite several Canadian treaties to export uranium only for "peaceful purposes".

1998:

Kyrgyzstan

A truck en route to a Cameco gold main spills 2 tons of cyanide into the Barskoon River, a local drinking water and agricultural water source. 2,600 people treated and more than 1,000 hospitalized.

2001−

onwards:

Ontario

A 2003 report by the Sierra Club of Canada provides details of 20 major safety-related incidents and unresolved safety concerns at the Bruce nuclear power plant.

2002:

Kyrgyzstan

Fatality at Cameco's Kumtor Gold Mine. Death of a Kyrgyz national, buried in the collapse of a 200 meter-high pit wall.

2003, April:

McArthur River, Saskatchewan

Cave-in and flood of radioactive water at the McArthur River mine. A consultant's report found that Cameco had been repeatedly warned about the water hazards right up until the accident happened.

2004:

Key Lake uranium mill, Canada

Canadian Nuclear Safety Commission approves Key Lake license renewal, despite continuing pit sidewall sloughing into the tailings disposed in the Deilmann pit. One million cubic meters of sand had already slumped into the tailings.

2004, April:

Port Hope, Ontario

Gamma radiation discovered in a school playground during testing in advance of playground upgrades. Although the Canadian Nuclear Safety Commission and AECL tried to dismiss the findings, the material under the school had to be removed when it was converted to low-cost housing in 2011. The contaminated material came from the uranium processing facility in Port Hope, now owned by Cameco.

2006, April:

Cigar Lake, Saskatchewan

A water inflow began at the bottom of the 6-meter wide shaft, 392 meters below the surface. All the workers left the area and removed equipment. According to a miner, "the mine's radiation alarm kept going off, but the radiation technician merely re-set the alarm, assuring us that everything was fine."

2006, Oct.: Cigar Lake, Saskatchewan

Cameco said its "deficient" development of the Cigar Lake mine contributed to a flood that delayed the mine project by three years and would double construction costs.

2007:

Port Hope, Ontario

Substantial leakage of radioactive and chemical pollutants into the soil under the uranium conversion facility ‒ leakage not detected by monitoring wells.

2008:

US/Canada

Uranium mines owned by Cameco in Nebraska, Wyoming, and Canada have all had spills and leaks. Cameco made a settlement payment of $1.4 million to Wyoming for license violations, and $50,000 to Nebraska for license violations.

2008, January:

Rabbit Lake mill

Seepage underneath the mill discovered after a contract worker noticed a pool of uranium-tainted ice at an outdoor worksite.

2008, May:

Port Hope, Ontario

It was discovered during soil decontamination at the suspended Port Hope uranium processing facility that egress from degraded holding floors had contaminated the harbour surrounding the facility, which flows into Lake Ontario.

2008, June:

Key Lake

Canadian Nuclear Safety Commission intends to approve the license renewal for Cameco's Key Lake mill although CNSC staff assigned 'C' ratings ("below requirements") in four out of 10 program areas assessed, including waste management, fire protection, environmental protection, and training.

2010:

Rabbit Lake

Uranium discharges from Rabbit Lake (highest by far in Canada) showed increase rather than the predicted decrease in 2010.

2011: Ship from Vancouver to China

A number of sea containers holding drums of uranium concentrate are damaged and loose uranium is found in the hold.

2012, August:

Port Hope, Ontario

Spill of uranium dioxide powder resulted in one worker being exposed to uranium and three other workers potentially exposed during clean-up.

2012:

Northern Saskatchewan

Draft agreement between Cameco, Areva and the Aboriginal community of Pinehouse includes extraordinary clauses such as this: "Pinehouse promises to: ... Not make statements or say things in public or to any government, business or agency that opposes Cameco/Areva's mining operations; Make reasonable efforts to ensure Pinehouse members do not say or do anything that interferes with or delays Cameco/Areva's mining, or do or say anything that is not consistent with Pinehouse's promises under the Collaboration Agreement."

2012, June 23: Blind River refinery, Ontario

Three workers exposed to airborne uranium dust after a worker loosened a ring clamp on a drum of uranium oxide, the lid blew off and about 26 kg of the material were ejected into the air.

2013‒ongoing: Canada

Cameco is battling it out in tax court with the Canada Revenue Agency (CRA). Up to US$1.6 billion in corporate taxes allegedly went unpaid. Cameco also involved in tax dispute with the US IRS. According to Cameco, the IRS is seeking an additional $32 million in taxes, plus interest, and may also seek penalties.

2013: English River First Nation, Canada

English River First Nation sign deal with Cameco and Areva, agreeing to support Millennium uranium mine and drop a lawsuit over land near the proposed mine. Some English River First Nation band members reacted strongly to the agreement. Cheryl Maurice said. "I am speaking for a group of people who weren't aware that this agreement was being negotiated because there was no consultation process."

2013, June: Saskatchewan

Federation of Saskatchewan Indian Nations Chief Perry Bellegarde says the provincial government should not issue any new permits for potash, uranium or other resource development until First Nations concerns are addressed. Bellegarde said the province's lack of a revenue-sharing deal with First Nations stemmed from "economic racism." "Do not issue a licence to Cameco or Areva or BHP until indigenous issues are addressed," he said.

2013, August:

Troy, Ohio, USA

A fire occurred on a truck carrying uranium hexafluoride which originated from Cameco's refinery in Port Hope, Ontario. Nuclear regulators in Canada – where the cargo originated – and in the US were not informed of the incident.

2013, Sept.:

Northern Saskatchewan

Sierra Club Canada produces a detailed report on Cameco's uranium operations in Northern Saskatchewan. It details systemic corporate failure by Cameco as well as systemic regulatory failure.

2014, Jan.:

Port Hope

About 450 Port Hope homeowners have had their soil sampled and properties tested in the first phase of the biggest radioactive clean-up in Canadian history. Some 1.2 million cubic metres of contaminated soil will be entombed in a storage facility. More than 5,000 private and public properties will undergo testing to identify places which need remediation. Port Hope is riddled with low-level radioactive waste, a product of radium and uranium refining at the Eldorado / Cameco refinery. The clean-up will cost an estimated US$1.3 billion.

2014, March

A statement endorsed by 39 medical doctors calls on Cameco to stop promoting dangerous radiation junk science. The statement reads in part: "Cameco has consistently promoted the fringe scientific view that exposure to low-level radiation is harmless. Those views are at odds with mainstream scientific evidence."

2015

A uranium supply contract was signed by Cameco and India's Department of Atomic Energy on April 15, 2015. Nuclear arms control expert Crispin Rovere said: "As with the proposed Australia–India nuclear agreement, the text of the Canadian deal likewise abrogates the widely accepted principle that the nuclear recipient is accountable to the supplier. This is ironic given it was nuclear material diverted from a Canadian-supplied reactor that led to the India's break-out in the first place. It would be like the citizens of Hiroshima deciding it would be a good idea to host American nuclear weapons within the city – the absurdity is quite astonishing."

2015: Saskatchewan

Cameco's uranium operations in Saskatchewan are facing opposition from the Clearwater Dene First Nation. A group called Holding the Line Northern Trappers Alliance has been camping in the area to block companies from further exploratory drilling in their territory. The group set up camp in November 2014 and plans to remain until mining companies leave. Concerns include Cameco's uranium deal with India and the health effects of Cameco's operations on the Indigenous people of northern Saskatchewan.

2015:

Key Lake mill, Canada

Cameco personnel identify the presence of calcined uranium oxide within a building. Five workers receive doses exceeding the weekly action level of 1 mSv.

2016: Smith Ranch ISL uranium mine, Wyoming, USA

The US Nuclear Regulatory Commission finds that a supervisor from Cameco subsidiary Power Resources deliberately failed to maintain complete and accurate records of workers' exposure to radiation. The NRC issues a Notice of Violation to Cameco.

2016: Smith Ranch ISL uranium mine, Wyoming, USA

 

 

The Nuclear Regulatory Commission issued a Confirmatory Action Letter to Cameco subsidiary Power Resources documenting actions that the company has agreed to take before resuming shipments of radioactive sludge to a Utah facility. The letter followed two incidents in which containers of radioactive barium sulfate sludge, a byproduct of uranium ore processing, arrived at their destination with external contamination from leakage during transport.

A more detailed, referenced version of this information, written by Mara Bonacci and Jim Green for Friends of the Earth Australia, is posted at wiseinternational.org

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License

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