One of the world’s largest uranium producers is to suspend production from its Canadian operations due to low commodity price.
Cameco, which provides around 17% of world supply, is halting production from McArthur River and Key Lake operations.
The firm cited continued uranium price weakness as the primary driver behind the move.
As a result of the suspension, the workforce at the operations will be reduced temporarily by about 845 workers – 560 employees and 285 contractors.
About 210 workers – 160 employees and 50 contractors – will be retained to maintain the facilities in safe shutdown state.
Tim Gitzel, Cameco’s president and chief executive, said: “With the continued state of oversupply in the uranium market and no expectation of change on the immediate horizon, it does not make economic sense for us to continue producing at McArthur River and Key Lake when we are holding a large inventory, or paying dividends out of proportion with our earnings.
“We regret the impact these actions will have on our workforce and other stakeholders and are doing what we can to cushion it while ensuring the long-term sustainability of the company.
“We believe these actions will help shield the company from the nearer term risks we face and will benefit all our stakeholders for their continued patience and support of our strategy to build long-term value.”
Cameco plans to meet its commitments to customers from inventory and other supply sources during the suspension, which will be reviewed on an ongoing basis until inventory is sufficiently drawn down or market conditions improve.
The duration of the suspension and temporary layoff is expected to last 10 months.
Uranium prices have fallen by more than 70% since the Fukushima accident in March 2011 and remain at low levels.