‘Happy to be partners:’ Cameco CEO shares details of Ukraine energy deal

A multi-billion-dollar deal between Saskatchewan-based uranium company Cameco and Ukraine will see Cameco become the country’s unofficial nuclear power provider.

On Wednesday, Cameco announced it had entered into a supply contract with Energoatom, Ukraine’s state-owned nuclear energy utility, to provide uranium for all of Ukraine’s nuclear power plants until 2035.

The announcement comes just a few weeks before the one-year anniversary of the Russian invasion of Ukraine.

Of Ukraine’s 15 nuclear plants, six are currently under Russian control. Tim Gitzel, Cameco president and CEO, said that means Cameco is responsible for the nine still controlled by Ukraine, which are located in the western parts of the country.

Should the other six plants come back under Ukrainian control, Gitzel said Cameco would then provide uranium for those plants as well. He said the company has the ability to produce enough to supply all the plants, and can sell off whatever Ukraine does not need to someone else thanks to the current market climate.

The uranium used in Ukraine will mainly be produced from Saskatchewan, with the uranium then going to an enricher to be changed into a gas before it’s sent to Ukraine.

Gitzel said safety will be something to keep in mind with the ongoing conflict in the region, but as soon as it is safe to do so Gitzel said he and others will be travelling to Ukraine.

The CEO called the deal a “mutual decision” between Cameco and Energoatom. Cameco has sold quantities of uranium products to Ukraine in the past, he noted, but nothing on the scale of the newly announced deal.

Gitzel also said he spoke about the deal with Premier Scott Moe, who he said was “delighted” to hear about the deal and Cameco’s upward trajectory.

With Ukraine and other European countries previously purchasing power from Russia, the war created the opportunity for this agreement.

“It was really when the Russians walked across the border that the opportunity opened up,” Gitzel said.

Gitzel said the total dollar figure on the deal is confidential, but he said it’s in the multi-billion-dollar range.

He added that Cameco will be supplying all of Ukraine’s nuclear power needs.

“We’re pretty proud of that and we’re happy to be partners with them,” Gitzel said.

The agreement was brought about by the ongoing relationship between Cameco and Energoatom, and Gitzel called the top executive a “good friend.” The two have eaten dinner in Kyiv, Gitzel said, where they talked hockey and attended other events together.

“It’s more than a contract,” Gitzel said. “We’re not saving the world, but we’re going to try and do a little part.”

The announcement, along with the fourth-quarter results from 2022, show Cameco is in a strong position, Gitzel said, thanks in part to renewed interest in nuclear power. He said the focus on decarbonization, electrification and the “race to net zero” over the past several years have worked to promote nuclear energy options.

Russia’s invasion of Ukraine “really accelerated our business and the world’s need to find other suppliers of uranium,” Gitzel added.

In the past year, Cameco has sold 80 million pounds of uranium.

“That, for us, is enormous,” Gitzel shared.

Cameco’s recovery is progressing well after the reopening of the McArthur River/Key Lake mine and mill – the world’s largest uranium mine operation – last February. Over the past year, Gitzel said Cameco’s goal of producing 15 million pounds annually has been increased to 18 million pounds, and with more sales the company is hoping to bump that up to 25 million pounds of uranium each year.

The plant that converts uranium into a gas in Port Hope, Ont. has been told to “put the pedal to the metal,” Gitzel added.

The outlook for uranium is something that looks “really, really good for Cameco, for our employees and for Saskatchewan,” Gitzel said. About 70 positions are currently open with Cameco and Gitzel anticipated more jobs will be created through the new deal.