Cameco signs major uranium supply deal with India (Business Network News – April 15, 2015)

http://www.bnn.ca/

BNN.ca staff

Canada’s largest uranium producer has signed a sales agreement with India. Cameco will provide the Department of Atomic Energy of India with 7.1 million pounds of uranium concentrate under a long-term contract through 2020.

“This contract opens the door to a dynamic and expanding uranium market,” Cameco president and CEO Tom Gitzel said in a statement. “Much of the long-term growth we see coming in our industry will happen in India and this emerging market is key to our strategy.”

The agreement, worth $350-million to Cameco, was announced by Prime Minister Stephen Harper during Indian Prime Minister Narendra Modi’s visit to Canada Wednesday. Cameco shares (CCO.TO 5.69%) surged almost five percent Wednesday to $19.80 on the TSX after the news was announced.

“This is a landmark deal for Cameco as it gives the company access to the second fastest growing uranium consumer in the world. The long-term supply agreement will provide revenue security at profitable prices for the company that could underpin its financial position, possible acquisitions, or even a dividend increase,” Cantor Fitzgerald analyst Rob Chang wrote in a note to clients. Chang has a ‘buy’ rating on Cameco with a price target of $26.15.

India uses nuclear power for three percent of its electricity, but a Cameco spokesman told Bloomberg News it hopes to increase that number to 25 percent by 2050. Since coming to power, Modi has tried to speed up price negotiations for building new reactors and purchasing fuel from France and Canada.

“India has a dynamic and growing nuclear energy program, and the opportunity to supply this major customer is a huge deal for our industry, the workers it employs and the Saskatchewan communities it supports,” Saskatchewan Premier Brad Wall, who was in Ottawa for the announcement, said in a statement.

Canada banned exports of uranium and nuclear hardware to India in the 1970s after New Delhi used Canadian technology to develop a nuclear bomb. But the two countries opened the door to nuclear co-operation with a deal that took effect in 2013.

For the original source of this article, click here: http://www.bnn.ca/News/2015/4/15/Cameco-signs-major-uranium-supply-deal-with-India.aspx

Comments are closed.