Cameco Corp. said Wednesday it has rejected a key Japanese customer’s attempt to cancel its contract — a move that would mean $1.3 billion in lost revenue — as the Saskatoon-based uranium giant works to protect deals signed with customers amid lower uranium prices.
Tokyo Electric Power Company Holdings Inc. issued a termination notice for a uranium supply contract on Jan. 24. On Monday, the Japanese power company said it would not accept a delivery scheduled for Tuesday. Cameco shares plunged 12 per cent just after the opening bell to $14.59 on the Toronto Stock Exchange.
Tepco alleges a “force majeure” event — or an act of God — has occurred because it has been unable operate its generating plants for the past 18 months due to government regulations enacted after the disastrous Fukushima nuclear accident of 2011.
“We’re confident that Tepco’s force majeure complaint is without merit,” said Cameco CEO Tim Gitzel on a last-minute conference call with investors Wednesday morning. “It appears to us and it is our opinion that Tepco simply doesn’t like the terms they agreed to, particularly the price and want to escape from the agreement.”
The entire nuclear industry is still feeling the aftershock of that disaster, with prices in the doldrums and customers re-evaluating contracts as they eye prices much lower than those in deals previously struck with Cameco.
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