Heather Exner-Pirot: Huge deal with Cameco also makes it a nuclear giant

Saskatoon uranium giant’s purchase of nuclear energy player Westinghouse has major implications beyond the business world.

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Last week, Cameco, the Saskatchewan-based uranium miner, announced it was acquiring US nuclear power giant Westinghouse in a partnership with Toronto-based Brookfield Renewables.

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The multi-billion dollar deal has made news and created buzz in the business sector, but its real significance is geopolitical. Russia’s invasion of Ukraine has set off a chain of reactions in the West, from friendly supply chains to prioritizing energy security, to accelerating demand for unstable electricity sources. fossils.

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The agreement with Cameco is a manifestation of all of this.

Headquartered in a nondescript neighborhood on the west side of Saskatoon, Cameco is the world’s largest publicly traded uranium company, backed by two of the most valuable mines on the planet, both located in the prolific ‘Athabasca to Northern Saskatchewan: Cigar Lake and McArthur River.

But a drop in uranium prices following the 2011 Fukushima reactor accident led to a tough decade for the company, prompting it to cut production. In 2020, it was ranked only the eighth largest company in Saskatchewan, based on revenue.

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A lot has changed in two years. As countries around the world seek to reduce the use of fossil fuels while continuing to provide reliable power, nuclear is emerging as the obvious solution. New reactor announcements arrive every week, and with them long-term uranium contracts.

According to the World Nuclear Association, there are 436 reactors in the world. 60 more are under construction and more than 400 new projects are planned or proposed in more than 30 countries.

The Russian state nuclear company, Rosatom, is a juggernaut. It is the world leader in new nuclear builds (its website lists eight in Russia and 32 abroad) and supplies fuel to 78 power reactors in 15 countries.

While Russia is only a uranium miner, it has about 40% of the world’s uranium enrichment capacity; its indispensable role in the industry allowed Russia to evade sanctions. Eastern Europe is captive to Russian nuclear fuel supplies, just as Germany is dependent on Russian natural gas.

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But the United States also needs it. Nuclear power cannot be a global energy solution if Rosatom is the center of it.

Another problem is its monopoly on high dosage low enriched uranium (HALEU). This fuel is needed for several advanced reactor designs that are now online, and Russia is the world’s only viable commercial supplier. This posed a security risk even before Ukraine; this is now unacceptable.

The acquisition of Westinghouse will help make Cameco the West’s answer to Rosatom – a one-stop-shop for utilities, offering services throughout the nuclear cycle – at a time when an alternative is desperately needed.

Cameco is not just a uranium miner. It also refines, converts and manufactures nuclear fuel in Ontario, although primarily for heavy water CANDU reactors.

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Westinghouse serves about half of the nuclear power generation industry in the United States and is the original equipment manufacturer for more than half of the world’s nuclear reactor fleet.

It also manufactures fuel for light water reactors, a type much more common in the world. Westinghouse has the capability to produce fuel for the most common model of Russian reactor used in Ukraine, the Czech Republic, Slovenia and Finland, and can provide an alternative to Rosatom’s services during future reactor construction.

This solves one problem, and at the instigation of the US Department of Energy, Cameco is working on the other: HALEU. Cameco holds a 49% interest in Global Laser Enrichment, a North Carolina-based company that commercializes laser enrichment technology to manufacture HALEU.

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The far-reaching US Inflation Reduction Act included provisions to bolster domestic fuel production, leading to a plan announced this month to buy in the order of $1.5 billion. of HALEU. Thanks to its American partners, Cameco is well placed to bid.

Russia will no longer have the monopoly of the HALEU.

With its low-carbon, high-energy-density baseload, nuclear is the future of energy. The Cameco-Brookfield-Westinghouse agreement positions Canada as a leader in this area.

But it does much more: it reduces Russian dominance in the nuclear sector, strengthens energy security in Eastern Europe, advances North American supply chain integration and facilitates the transition to low energy. carbon emission.

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Nothing the federal government has done since February is as geopolitically significant.

Cameco is now not only a uranium giant, but also a nuclear giant, just as this industry is entering a renaissance. It provides a classic example of how Canada’s vast natural resources can be used to advance our interests and those of our allies on the world stage.

Heather Exner-Pirot is a Principal Investigator at the Macdonald-Laurier Institute.

  1. Tim Gitzel, CEO of Cameco.  The company announced this week that it would buy a 49% stake in Westinghouse Electric Co., one of the world's largest nuclear services companies.  (Matt Smith/Saskatoon Star Phoenix)

    Cameco acquires stake in Westinghouse Electric and enters the nuclear energy business

  2. Cameco CEO Tim Gitzel pictured at the uranium mining company's headquarters in Saskatoon.

    Cameco is optimistic about the future as it reports turnaround performance

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