Coronavirus Fears Lead To Shutdown Of Uranium Mines In Saskatchewan, Canada

The temporary closure of uranium mines in northern Saskatchewan due to the coronavirus pandemic had led to worries about their economic impact on this remote part of Canada.

Last week, Cameco Corp. (CCJ) shut down its mine in Cigar Lake, while its partner company Orano Canada closed the nearby McClean Lake mill.

“We are in unprecedented and challenging times,” said Cameco president and CEO Tim Gitzel. “In the face of great uncertainty, our first priority is to protect the health and well-being of our employees, their families and their communities.”

Cigar Lake ore is processed at Orano Canada’s McClean Lake mill.

“We are all in this together,” said Orano Canada president and CEO Jim Corman. “This is a difficult time for many and we understand the concerns we are hearing. McClean Lake will safely be put into care and maintenance within the next few days and we will continue to assess the situation, always keeping health and safety at the forefront.”

Cameco, with a market cap of $3.27 billion, is the largest publicly traded uranium company in the world and accounts for about 18% of global production. The Cigar Lake property is also the world's largest undeveloped uranium deposit.

Cigar Lake’s workforce comprises about 320 Cameco employees and another 240 outside contractors. The McClean Lake mill typically has 160 workers.

About 35 of the Cigar Lake will remain at the Cameco site during the maintenance period, while 50 will stay on at the McClean Lake site.

The suspensions are expected to last at least four weeks.

“The shutdown of this mine will be an economic blow to the North and my thoughts are with those who now find themselves unemployed during this difficult time,” said Gary Vidal, a local Conservative MP. “This decision, though tough, is important to maintain the health and safety of the employees and their communities.”

There are no confirmed cases of the virus at either of the operations, the companies added.

All laid off Cameco Cigar Lake employees will receive their regular pay and benefits during the four-week care and maintenance period.

The Cigar Lake underground uranium mine is owned by Cameco (50.025%), Orano Canada (37.1%), Idemitsu Canada Resources (7.875%) and TEPCO Resources Inc (5%). It is operated by Cameco.

“A large portion -- about 50% -- of Cigar Lake’s workforce comes from the surrounding communities and First Nations in northern Saskatchewan, which are likewise remote and isolated, with limited health services,” said Jeff Hryhoriw, director of government relations and communications at Cameco. “These realities would greatly compound the problems a COVID-19 outbreak would present, so we need to take every precaution to ensure we don’t inadvertently become a point of transmission into these communities.”

What complicates matters is that shutting down and restating uranium mines is extremely costly and labor-intensive.

“Closing that [Cigar Lake] mine is not a question of just flicking off the switch,” said Ken Coates, Canada Research Chair in regional innovation at the University of Saskatchewan’s Johnson-Shoyama Graduate School of Public Policy. “It actually takes a lot of time and effort to close a mine down properly to make sure that the machinery is protected, cleaned up properly and everything like that. Particularly uranium mines more than most. And then you have exactly the same kind of expenses at ramp-up time. You don’t just walk back and push a button and everything gets going again… With big mining projects like this with literally hundreds of millions of dollars of sophisticated equipment, every closure is a risky enterprise.”

Coates also said these closures will hurt the local economy.

“Unemployment rates [there] are sky high. The number of full-time, decent jobs has been declining anyway, separate from this collapse right now,” he said. “The full impact on the community as a whole is staggering.”

Brooke Dobni, professor of strategy at the University of Saskatchewan’s Edwards School of Business, said mine closures will have ripple effects across the province’s economy.

“Most of the people in the North either live off the land or they’re in the service of businesses like Cameco or the government of Saskatchewan or another mining company. It’s tough even in good times, let alone difficult times,” Dobni said.

Local First Nation (Native American) tribal leaders support the mine closures as a way to protect the health of workers. But they too worry about the longer-term economic impact if these shutdowns are prolonged.

“For our business entities, the impacts are and will continue to be extremely challenging in the coming months,” said Chief Tammy Cook-Searson of the Lac La Ronge Indian Band’s business arm, Kitsaski Management Ltd. “Although the unprecedented loss in economic activity causes us significant concern for ongoing sustainability, we will always prioritize the safety and well being of our employees above all else.”

Coates noted that First Nations have been calling for the closures of mines in their territories.

“The First Nations are [concerned] with very good reasons about the possible threat of this virus spreading into their communities and they will take any action to stop that from happening,” he said.

Coates added that northern Saskatchewan has been suffering economically for years, but largely ignored by the Canadian federal government in faraway Ontario.

“That devastation has been largely hidden from national view. Southern Ontario doesn't care too much about what happens in a small series of isolated Indigenous, Métis [people of mixed European and Indigenous ancestry,] and First Nations communities in northern Saskatchewan,” Coates said.

All Canadian uranium mines are located in Saskatchewan although processing, refining, conversion, fuel fabrication, research and waste management occur at nuclear power stations in Ontario and New Brunswick.

Dobni is optimistic about the future of uranium mining – as long as the government encourages and supports it.

“Uranium’s the cleanest approach to providing power. It’s very expensive, there’s a lot of infrastructure but for the most part uranium’s the answer to cleaning up the environment or nuclear power but we’re slow to take that up,” he said. “Because it’s a big expense to build a nuclear power plant, but it’s [for] the long-term. And everybody now thinks short-term. it’s hard to make long-term economic business decisions when you’re in that type of situation.”

Canada is the world’s second-largest uranium producer (behind only Kazakhstan), with annual uranium production ranging between 8,214 and 12,552 tons, since 1998.