A Saskatoon-based professor is voicing cautious optimism over the future of Cameco’s mining operations just days after the company announced massive layoffs.
The company said Wednesday it will temporarily close its Key Lake and McArthur River facilities due to low uranium prices worldwide, affecting 845 jobs for at least 10 months.
However, Edwards School of Business professor Brooke Dobni told 650 CKOM Thursday there’s hope for those workers.
“There is light at the end of the tunnel,” the strategy professor said. “The world does need uranium, and it’s just a matter of time before (prices) get back to where they should be.”
Dobni noted commodity prices typically endure slumps between five and seven years long, and uranium is nearing the end of that cycle.
Prices for the radioactive power source began falling after the Fukushima nuclear disaster in 2011, when an earthquake and tsunami leaked radiation from a power plant.
According to Cameco, prices have fallen nearly 70 per cent since then as Japan pulled back its nuclear program and other countries like Germany began shutting down reactors.
Dobni said the pullback has led to an oversupplied market, necessitating reductions in production from actors like Cameco.
He also pointed to new reactors being built in India and China as a source for hope. He also said Japan is slowly considering bringing their plants back online.
“The price will bounce on the bottom for awhile and then start to make its way up as supply and demand get more in tune with each other,” he said.
Dobni emphasized he doesn’t know for sure when the prices will rebound, since the Asian reactors are likely years away from producing power, but he is making a prediction.
“A year or two out we’ll start to see prices go back up,” he said. “That’s the hope anyways.”
— With files from 650 CKOM’s Chris Carr.