Cameco and Orano Canada have announced plans to restart operations at the Cigar Lake uranium mine and the McClean Lake mill. Cameco will restart mine operations at the beginning of September, and Orano expects to be processing uranium by the middle of the month.The McClean Lake mill (Image: Denison)
Cigar Lake is operated by Cameco and its ore is milled at McClean Lake, operated by Orano. Both were placed in care and maintenance in March due to the COVID-19 pandemic. Cameco President and CEO Tim Gitzel yesterday said the proactive shutdown of operations has resulted in an additional CAD37 million (USD27.5 million) in care and maintenance costs for the company and an increased reliance on the spot market for uranium supply. Given recent increases in the spot market price of uranium, such purchases come at a higher cost than Cameco's "produced pounds", Gitzel said during the company's quarterly results webcast.
"While health and safety are the primary considerations for the timing of our Cigar Lake mine restart decision, there were also commercial considerations, including market-related factors and the impact on our cost structure," he said. The company will not be able to make up the lost production and is now targeting its share of 2020 production to be up to 5.3 million pounds U3O8 (2039 tU) in total, he said.
Cameco expects it will take about two weeks to get Cigar Lake back into production, Gitzel said. "The restart does not change the fact that there remains tremendous uncertainty about uranium supply as the pandemic continues to cause unplanned supply disruptions," he said. The restart will be dependent on factors including the company's ability to establish safe and stable operating protocols, availability of the necessary workforce and how the COVID-19 pandemic is affecting northern Saskatchewan, he added.
The ongoing impact of COVID-19 restrictions in Kazakshtan, where Cameco holds a 40% interest in the Inkai uranium joint venture, and the indefinite suspension of operations at Key Lake/McArthur River, will mean that Cameco will have to "rely more heavily on the spot market" in 2020, and may begin purchasing spot market uranium this year ready for 2021, Gitzel said.
Cameco restarted the Blind River refinery and Port Hope uranium conversion plant in May.
Orano President and CEO Jim Corman said much of the work planned for McClean Lake's summer shutdown had been brought forward and the mill is able to "shift gears to efficiently move back into production". The company has implemented robust health and safety procedures, including pre-screening of employees, mandatory COVID-specific training, temperature monitoring, increased sanitation and isolation procedures, he said, and safety protocols that have been put in place to respond to the COVID-19 pandemic threat will be maintained as the on-site workforce increases and restart activities ramp up.
The company will not be able to make up the lost production of the past five months but is targeting a total of 10.5 million pounds U3O8 of packaged production for 2020, Corman said.
Cigar Lake, an underground uranium mine in northern Saskatchewan, is owned by Cameco (50.025%), Orano Canada Inc (37.1%), Idemitsu Canada Resources Ltd (7.875%) and TEPCO Resources Inc (5.0%). Ore from Cigar Lake is ground up and thickened in underground processing circuits before being pumped to the surface as a slurry, which is then transported by truck the 80 kilometres to McClean Lake for processing. The McClean Lake projects, which include the mill and uranium deposits, are owned by Orano Canada (70.0%), Denison (22.5%) and OURD (7.5%). McClean Lake currently receives all the ore it processes from Cigar Lake.
Researched and written by World Nuclear News