Uranium Deal worth ‘billions’ to Sask.
Canada, India ink nuke pact
Saskatchewan companies now have the green light to sell uranium to India.
The Canadian Nuclear Safety Commission and India’s Department of Atomic Energy finalized an agreement that Prime Minister Stephen Harper and Indian Prime Minister Manmohan Singh announced last November.
“It is the final substantive step in completing the Nuclear Co-operation Agreement between our two countries,” said Natural Resources Minister Joe Oliver in making the announcement at Cameco Corp. headquarters in Saskatoon.
“It will allow Canadian companies to export controlled nuclear materials, equipment and technology for peaceful purposes to India under the safeguards applied by the International Atomic Energy Agency.”
Until now, Canadian companies have been unable to ship Canadian uranium to India.
This agreement follows a similar deal with China.
Saskatchewan Premier Brad Wall said the agreement will be worth billions to Saskatchewan.
Wall said the uranium industry has been an important industry for the province despite not having had access to “the two most robust civilian nuclear power countries on earth — India and China.
“(This agreement) will mean literally billions of dollars worth of sales of Saskatchewan uranium into these two markets.”
India is the fourth-largest energy consumer in the world and is expected to triple its electricity supply within the next 25 years.
“It’s a new market for us and one that we are pretty excited about,” said Ken Seitz, Cameco’s senior vicepresident and chief commercial officer.
“We will be over there this year and start talking about putting uranium under long-term contracts with the Indian nuclear utility.”
India has 12 new reactors to be commissioned by 2021.
“The Indians today consume about two million pounds per year on world consumption of about 175 million pounds per year,” Seitz said.
“We expect over the next 10 years that is going to grow to seven million pounds per year, almost fourfold, creating lots of opportunity for companies like Cameco,” he said.
Oliver said the agreement is in accordance with Canada’s nuclear non-proliferation policy and the government will ensure Canadian exports only go to facilities in India under International Atomic Energy Agency safeguards.
Changes to uranium royalty structure
Access to new markets comes at the same time the provincial government tweaked the royalty structure for uranium in its latest budget.
“We will now have access to markets that we didn’t have before,” Wall said. “And we’ll also have a very competitive royalty structure.”
The new royalty structure recognizes actual costs incurred by industry and replaces an allowance-based system where allowances were as much as 50 per cent below the industry’s actual expenditures.
The changes are expected to decrease revenues by $15 million this year and a similar amount next year.
“Without those changes we are not competitive,” Wall said.
“All of the access to the Indian and Chinese markets may be not as relevant if we have an uncompetitive royalty structure.
“We want to facilitate expansion and investment here,” Wall said.
“Right now other countries have a much more competitive structure than we do, so the budget seeks to eliminate that gap over a period of time.
“We want to see to the extent that expansion is possible — maybe to the extent there is a new greenfield mine possible down the road — we want to be able to make the case that this is the place to do it. We have the market access, but we also have competitive taxes.”
In Canada, the nuclear power generation sector produces about $5 billion in annual revenues and supports 17,000 direct jobs, while uranium mining accounts for more than $1 billion per year in exports and supports 5,000 direct jobs.
via Prosperity Saskatchewan http://prosperitysaskatchewan.wordpress.com/2013/04/09/uranium-deal-worth-billions-to-sask/