Cameco Corp (CCO.TO) will spend $123.8 million to buy a 24 percent stake in a General Electric-Hitachi uranium enrichment venture and extend its reach in nuclear fuel production, the world's biggest uranium producer said on Friday.

Global Laser Enrichment, 51 percent owned by General Electric Co (GE.N) and 49 percent held by Hitachi Ltd (6501.T), is developing laser technology to enrich uranium for nuclear power plants. It projects a start-up date of 2012 for an enrichment plant and commercial production in 2013.

Cameco said it is using existing credit facilities to fund its investment in the North Carolina-based operation and does not expect to incur further development or commercialization expenses until 2010.

Cameco is currently involved in all steps of the nuclear fuel cycle leading up to uranium enrichment, which is a key step in the process of producing fuel for light water nuclear power plants.

Cameco has also signed a deal with Global Laser Enrichment to jointly market uranium and enrichment services to meet customer demand for bundled services.

Demand for enriched uranium is projected to increase significantly in the next decade with the construction of new nuclear power plants, Cameco said.

This investment further expands and integrates Cameco's interests in the nuclear fuel cycle as we pursue our objective to be a leading nuclear energy company, producing uranium fuel and generating clean electricity, said Cameco Chief Executive Jerry Grandey in a statement.

Cameco shares rose about 2 percent, or 69 Canadian cents, to C$38.25 on the Toronto Stock Exchange on Friday morning.

($1=$1.02 Canadian)

(Reporting by Susan Taylor; Editing by Peter Galloway)

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