The world’s largest uranium miner sought to allay concerns over the future of the global nuclear industry yesterday as trouble continued at a Japanese power plant damaged in last week’s earthquake and tsunami.
“Looking beyond the events of recent days, we at Cameco don’t see a dramatic effect on the fundamentals of our uranium business,” said Cameco Corp. CEO Jerry Grandey.
Cameco’s shares took a beating on the Toronto Stock Exchange yesterday, tumbling nearly 13 per cent to close at $31.70. It wasn’t alone: Uranium One fell nearly 28 per cent and Denison Mines Corp. more than 22 per cent.
Uranium is a major economic engine for Saskatchewan, where Cameco is headquartered.
About 10 to 12 per cent of Cameco’s current volumes are bound for Japan, with that number expected to rise to between 18 to 20 per cent in the long term.
But even as Switzerland and Germany put the brakes on their nuclear programs, observers said China, India and Japan will likely continue to build nuclear energy plants, which means the uranium stock drops could be a buying opportunity for investors who believe the world’s nuclear energy demand will support the industry long term.
As for the wider impact of the Japanese disaster, analysts predicted it will have little effect on the Canadian economy. In the long view, both global and Japanese gross domestic product will likely get a boost from the massive rebuilding effort, economists said, which means Canadian exporters of copper, oil, lumber and other materials stand to benefit.