The proposal to lift foreign ownership restrictions on uranium mining in Canada is likely to spur increased investment in the sector, but more importantly, could open up key foreign markets to Canadian miners such as Cameco Corp.
Industry players said the competition panel's recommendation that Canada require reciprocal concessions from other countries that want to invest in Canadian uranium production will open foreign markets that now prohibit investment.
Jerry Grandey, Cameco's CEO, said his company has wanted to explore for uranium in countries such as China, India and Brazil for years, but has been stymied by those nations' restrictions. “Being already a global participant in the uranium industry, we are interested in being able to explore prospective jurisdictions around the world. In many of those, we are precluded by the policies of those jurisdictions,” he said.
Canada is among the world's top uranium producing countries and does not restrict foreign ownership of uranium exploration assets. However, it does prohibit foreign-owned companies from controlling uranium mines that are in production. (Separate federal legislation protects Cameco from significant foreign ownership or takeover.)
There have been exceptions. A waiver has been granted to French nuclear giant Areva Group to control and operate the McClean Lake mines and mill in Saskatchewan. Canada's Denison Mines Inc. owns 22 per cent of the operation.
Canada has treated uranium mining differently than other metals because of safety and security concerns as well as the strategic nature of the commodity, which is used to make nuclear fuel.
Denison CEO Peter Farmer said he believes uranium is much like other commodities.
“Uranium mining and the stuff we produce – the yellowcake – is not extra-special stuff. You're not going to make dirty bombs out of it. Is it a strategic mineral? It's no more strategic than nickel. The truth is, most of what we produce is exported,” he said.
While there would be more competition for Canadian assets from foreign companies, Mr. Grandey said the opportunities in other countries for Cameco would be far more beneficial.
“Over time there would be more competition and increased foreign involvement in the uranium sector. Cameco is in favour of that as long as we see reciprocity going the other way where we can compete in foreign jurisdictions,” he said.
