Chinese deals for uranium

Cameco has announced two moves to found itself as a major uranium supplier to a booming Chinese nuclear fuel market featuring long-term contracts for the first time. The Canadian producer, which ranks second in the world in terms of manufacture, has said it will be supply 23 million pounds of uranium oxide to China Nuclear Energy Industry Corporation (CNEIC) over the next ten years.

CNEIC is also pursuing planned long-term cooperation with China Guangdong Nuclear Power Company (CGNPC).CNEIC is a subsidiary of the giant China National Nuclear Company (CNNC), which has seven reactors in process and nine more under construction. CNNC also owns a major stake in CGNPC, which has four reactors in operation and 13 under construction. Between them the companies plan to take Chinese nuclear generating ability from the current 9 GWe to as much as 160 GWe in 2030.

Jerry Grandey, CEO of Cameco, said that the supply deal with CNEIC "indicates clearly that we mean to be very active in the world's fastest growing uranium market." He said he hoped talks with CGNPC would effect in a "long-term relationship." Grandey wants Cameco to double its uranium manufacture by 2018. Until now Chinese firms have not been allowed to make long-term uranium supply deals and have instead supplemented equity stakes in uranium mines with purchases on the spot market.