If the future really is in China then Cameco (CCO-T, CCJ-N) is showing its business savvy by putting together deals with two of the country’s biggest nuclear energy providers.
The Saskatoon-based uranium heavyweight announced it has signed agreements that could see it became a key supplier of uranium to one of the world’s hottest economies.
The first deal is with China National Nuclear Corp. (CNNC) and will see Cameco move roughly 23 million lbs of uranium concentrate to China through 2020.
The agreement marks Cameco’s first long-term uranium supply agreement with a major Chinese nuclear utility although it is still subject to Chinese government approval and no dollar value was released as is generally the case with uranium contracts.
CNNC is China’s largest nuclear generator with seven reactors but has another 10 reactors under construction as it looks to build itself into one of the world’s leading nuclear power companies by 2020.
Cameco said reports from China indicate that during the next decade the country plans to grow its nuclear capacity to 70 gigawatts from its current level of 9 gigawatts, and could produce as much as 160 gigawatts by 2030.
Such growth potential on the demand side has Cameco planning to double its own uranium production by 2018.
Cameco also said it was working on a deal to supply uranium to China Guangdong Nuclear Power Holding (CGNPC).
CGNPC has four existing reactors and more under construction. It says it will be producing 50,000 megawatts of power by 2020.
The announcements from Cameco come just as Chinese President Hu Jintao’s arrives in Canada for the G20 meeting. Hu has said he wants China’s trade with Canada to double by 2015.
In Toronto on June 25 Cameco shares were up 32¢ to $23.50 on 815,000 shares traded.
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