It’s been a rough go for Cameco in recent years as commodity prices for uranium continue to decline.
Uranium, along with other commodities in Saskatchewan like potash, have been struggling to keep their collective head above water.
As well, Cameco is still feeling the effects from the Fukushima nuclear disaster in 2011. That instantly put the breaks on nuclear expansion plans across the world. Reverberations were felt all the way back to Cameco’s head office in Saskatoon as prices now are at least 70 per cent lower than they were in 2011.
Cameco’s stockholders have seen their dividends shrink dramatically by 80 per cent in that time frame as well. Recently, Cameco announced a $200-million loss for 2017. Cameco has cut production already at its Saskatchewan Key Lake and McArthur River mines resulting in layoffs for hundreds of employees while the firm awaits a rebound in market prices.
The trickle-down effect to suppliers has been even more dramatic. For Kitsaki, that has a direct affect on operations for both Athabasca Catering and Northern Resource Trucking.
“It was a multi million-dollar loss in revenue for us,” says NRT’s Dave Mcllmoyl, “It’s significant.”
For now, NRT has been kept busy hauling propane and other goods to northern communities using ice roads, But once spring arrives, those roads will dry up, so to speak. “It’ll be quite slow for us.”
The uranium slowdown has forced Mcllmoyl and his crew to seek out new work in order to keep NRT’s employees on the road. They’ve landed a few new contracts hauling fuel and cement once the spring and summer months arrive.
“On one hand, it’s frightening for us. But on the other hand, it’s good for us. It makes us hustle and get out there.”
With a respected name in the trucking industry, NRT is positioned well, Mcllmoyl believes, He expects once Cameco’s business returns to a more solid footing, there will be no reason to give up the new work NRT has uncovered. New business is always welcomed and will be maintained, he says.
“With the equipment we have and the skill set of our drivers, we’re in a good position.” NRT also benefits from having a great long-term safety record.
Athabasca Catering also took Cameco’s recent decline on the chin.
“The biggest problem for us is our mandate is to employ northern people, and with that business in decline and into care and maintenance, it just means that those employment opportunities have been reduced,” says Alan Cole, Managing Director of Athabasca Catering. “And really, there are few other employment opportunities in the North.”
The company has historically provided Cameco with keeping the mining camps running efficiently with food services, housekeeping, janitorial and other services. But when the Key Lake and McArthur River mines went into care and maintenance, Athabasca Catering’s services were reduced also.
Once Cameco gives the green light to production at Key and McArthur again, Cole and his people are ready since a contract has been signed that gives Athabasca Catering solid footing into the future.
“Essentially, we’ve secured a significant amount of employment for our northern folks for the next two generations, really.”
Cole, who has worked in the industry around the world, became managing director of Athabasca Catering a little more than a year ago. He is confident he will be able to generate new revenue for the company by looking past the uranium decline.
“That’s my mandate for the year,” says Cole. “That’s the key piece we’re adding to increasing our profitability.”
But once Cameco sees itself ready to reopen the mines, Athabasca Catering is ready to return to work.
“Cameco has made it quite clear that it is their intent to bring everyone back again.” Cole has maintained a strong business relationship with the senior executives at Cameco during these turbulent times.
“It’s about keeping the relationships open. It’s not about me. It’s not about Athabasca Catering. It’s about the people of the North, That’s all it’s about in the long run.”
There are signs, however, that the market is poised to return to a more sustainable future after the world’s largest uranium miner- Kazakhstan’s state-owned business KazAtomProm – has decided to reduce production by 20 per cent over three years.
Cameco and KazAtomProm are the two major suppliers of uranium globally.
But news that there are dozens of new nuclear facilities being planned in India, China and Russia is music to Cameco’s ears, As a major supplier of the world’s highest-grade uranium, Cameco is hoping for a market rebound to help reverse fortunes.
Market analysts have been vocal about Cameco’s leadership providing solid planning as the company weathers the storm. For instance, Cameco has wanted to avoid locking in contracts amid such low prices which would severely strain any potential for growth.
It’s now a waiting game,., waiting for the down market to end. And Mcllmoyl and Cole are patient men.