Cameco layoffs concerns workers, analyst optimistic

Hundreds of workers at mining operations in northern Saskatchewan have been in touch with their local unions following news that Cameco plans to permanently lay off hundreds of workers at the McArthur Lake and Key Lake uranium operations.

The workers are worried and concerned, and are left with few other options for employment in northern Saskatchewan, according to Local 8914 Union President Denis O’Hara. The workers are eligible for employment insurance benefits and Cameco has agreed to pay health benefits and a 75 per cent top-up of wages until November 15, but O’Hara said the employees still have a tough decision to make.

“Following November 15, their name either goes on a three-year recall list – in other words they will still be Cameco employees for the next 36 months – or they can apply for a severance package and terminate their employment,” O’Hara said Thursday. “Fifty per cent of the union workforce is of Aboriginal ancestry, most of whom live in northern communities where there’s no job opportunities.”

Cameco announced Wednesday that it would permanently lay off the workers who have been temporarily laid off since January. The company said the decision is due to low uranium prices and a surplus of supply in stores around the world.

The job losses include 550 workers at Cameco’s McArthur Lake and Key Lake site, and another 150 from the company’s corporate office. About 200 workers will keep their jobs in the north in order to maintain the site and facilities, the company said.

Dave McIlmoyal, President of Northern Resource Trucking, said the company laid off about 20 drivers back in January when the temporary layoffs were announced and will likely make those layoffs permanent now. NRT has been working in the north for more than 30 years, he said, and has been actively looking for new routes in Ontario, Manitoba, northern Alberta, and northern British Columbia.

The company has weathered downturns in the mining industry before, but McIlmoyal said Cameco’s announcement will have a big impact on residents of northern Saskatchewan.

“We have the equipment and the people that are used in places like the oil patch and other industrial settings and that sort of thing, so we’re just leveraging the skills that we had in the uranium mining industry to expand and survive,” McIlmoyal told paNOW. “I certainly don’t want to minimize the impact, but we’re a little different because trucks can move other places … but it’s a very difficult time for all of us.”

Cameco in it for long haul says analyst

The financial impact of Cameco’s layoffs is still yet unclear, but business analyst Paul Martin said the uranium giant isn’t going anywhere with demand for uranium increasing around the world.

Martin estimates the uranium market normalizing by 2020 at which time he said it’s Cameco’s intent to come back stronger than before.

“There will be more jobs, not fewer down the road,” he told 650 CKOM Thursday.

As a producer of other commodities such as oil, potash and grains, Martin said Cameco’s announcement is a sobering reminder about how the province’s economy hinges on world markets.

He said prices are very volatile in each of those markets, putting us at the bottom end of the cycle right now.

“They need to turn off the tap, turn off the supply, consume whats out there and that will drive the price up,” Martin said.