Cameco ownership rules changed

The Canadian government has passed legislation allowing more foreign ownership of shares of Cameco (CCO-T), the world’s largest uranium supplier.

Under the new rules, individual non-residents can hold a maximum of 15% of Cameco’s shares, up from 5%. They are allowed a total vote of 25%, up from 20%. The ownership limit for an individual Canadian shareholder remains unchanged at 25%.

Cameco says the changes will give the company easier access to investment capital and greater flexibility to compete in the global market.

The company’s headquarters will remain in Saskatchewan.

The ownership restrictions are part of the Eldorado Nuclear Limited Reorganization and Divestiture Act. They were put in place when the federal government privatized Eldorado Nuclear, one of Cameco’s predecessors.

In May, the Canadian Nuclear Safety Commission (CNSC) approved an application by Bruce Power to operate nuclear power stations in southwestern Ontario. Cameco is currently the exclusive supplier of fuel to the Bruce reactors there.

Bruce Power is a partnership among majority owner British Energy, the UK’s largest electricity generator, Cameco Corporation (15%) and the two main unions that represent employees on the Bruce site, the Power Workers’ Union (up to 4%) and the Society of Energy Professionals (up to 1.2%).

Cameco’s investment in Bruce Power is $93 million over two years. In addition, the company will, as needed, purchase $43 million worth of finished fuel inventory for resale to the partnership, mostly during the first year of operation.

The licences are for the four Bruce B reactors (with a capacity of 3,140 megawatts) and the four Bruce A reactors, which not currently operating. Any change in the status of the Bruce A reactors requires regulatory review and further approval by the CNSC. The licences expire on October 31, 2003.

The partners have closed a $3.2-billion lease agreement at Bruce with provincially owned Ontario Power Generation. The lease makes Bruce Power the operator of the Bruce A and B stations until 2018, with an option to extend the lease for another 25 years.

Bruce Power plans to bring two of the A station’s reactors into operation in two-to-three years at a price tag of $340 million.

At full steam, all six reactors will represent about 4,600 megawatts of electricity capacity, or about 15% of Ontario’s capacity. Each reactor is also expected to generate $40 million in annual earnings.