Agreements halt shipments of CIS uranium to U.S.

The recently concluded agreements between the governments of the U.S. and of six uranium-producing republics of the Commonwealth of Independent States (CIS) will have a positive impact on the uranium market, says Cameco (TSE) of Saskatoon.

“We believe that these agreements will lead to greater stability in uranium markets, especially in the U.S., and to prices that more closely reflect the costs of production,” said Bernard Michel, Cameco president, noting that the U.S. is the largest uranium market in the world and accounts for about 60% of Cameco’s sales.

The current spot price remains below US$10 per lb. Cameco estimates that each $1 increase in the spot price of uranium results in about a $9-million increase in the annual net earnings of the corporation.

The agreements were executed in mid-October after nearly a year of consultations between the U.S. Department of Commerce (DOC) and each of the following CIS republics: Kazakhstan, Kyrg-hyzstan, Russia, Tajikistan, Uzbekistan and Ukraine. The agreements result in the immediate suspension of CIS uranium imports into the U.S. market until the price returns to US$13. The arrangements will replace the preliminary tariff of nearly 117% on CIS material which had been levied in May, 1992, as a result of the anti-dumping petitions filed by a group of American uranium producers and the Oil, Chemical and Atomic Workers International Union against these republics of the former Soviet Union.

The agreements will limit imports for eight years and provide for an additional two years of monitoring. They also specify detailed anti-circumvention measures which allow for the complete monitoring of any CIS product movement. Any CIS material processed in another country will retain its CIS origin and any other origin material which is enriched in the CIS will be considered of CIS origin.