Cameco President and CEO Jerry Grandey told shareholders Wednesday the recent arrest of the former head of KazAtomProm, along with seven senior executives of the state uranium company, has not impacted the Inkai joint venture.
The Kazakh executives were charges with making illegal sales of the country's uranium resources to foreign companies, including Canadian-based Uranium One.
In response to questions during Cameco's annual general meeting Wednesday, Grandey said the company had been aware for a while of the investigations of western companies active in Kazakhstan. So far we have been left alone, he said, and the company is being told it is business as usual.
Grandey noted it took Cameco five years to get leases and licenses for its Inkai joint venture, which is 60% owned by Cameco and 40% by KazAtomProm because the Canadian company proceeded in a very careful way unlike other foreign uranium companies who were licensed very quickly.
Commercial production at the Kazakh in-situ recovery uranium mining project is expected this year.
Meanwhile, Grandey is very bullish on the future of uranium demand as 24 nuclear reactors are now under construction in China with five more projects to begin this year. Meanwhile, India's recent national election will give momentum to civilian nuclear reactor programs in that country, he suggested.
Grandey estimated that the world's nuclear reactors will consume 2 billion pounds of uranium over the next 10 years, and that 20% of that total (400 million pounds) will have to come from new uranium mines or expansions of current operations.
As world demand rises, we intend to dramatically expand our own production and growth our market share, he said. Grandey told reporting that the company will go from producing 20 million pounds annually to 35 million to 36 million pounds yearly in the next 10 years.
He told shareholders at the AGM that the company's portfolio of long-term uranium contracts provides price protection for Cameco, and also enable the company to expand. Grandey estimated that 65% of Cameco contracts will see price improvements flow directly to Cameco when the spot price improves.
In the meantime, Grandey noted that India and China are now searching for fuel, as the Japanese, Koreans and Chinese are scouring the world for deals.
Cameco and its partners have 15.2 million hectares of prospective land, which Grandey is confident will help meet future uranium needs.
However, Grandey warned that it is virtually impossible for Cameco to run all its operations at 100% capacity when taking into consideration aging infrastructure. The company experienced a number of equipment failures last year, prompting Cameco to re-examine its preventative maintenance programs to ensure parts for critical pieces of equipment are located at mine sites.
Grandey said Cameco's plan to conduct major revitalization work while also maintaining production.