The nuclear crisis at a Japanese power plant triggered by a massive earthquake and tsunami in March will have a relatively minor impact on global demand for uranium over the coming decade, one of the world's top miners of the mineral said Friday.
Saskatoon-based Cameco Corp. expects to see 10 fewer nuclear reactors built by 2020 than would have been the case before the twin disasters devastated Japan's eastern coast and badly damaged the Fukushima Daiichi nuclear power complex.
Accounting for reactors that will have reached the end of their lives by 2020, Cameco sees the net gain for the world's reactor fleet being 91 in 2020. Prior to Fukushima, the company forecast a net gain of around 100.
"From a fuel supplier's perspective, we expect this change in outlook will reduce the cumulative demand for uranium over the next 10 years by just four per cent. It remains true, then, that new uranium supply will have to be brought into production to meet this demand," said chief executive officer Jerry Grandey.
"Thus, our reading of the Fukushima-adjusted fundamentals of the uranium business leads to one conclusion for Cameco: very little has changed in the way we see the world. Our strategy of doubling uranium production by 2018 continues to make sense."
Grandey made his remarks on his last analyst conference call before he retires in June. Tim Gitzel, who is president of the company, will take Grandey's place.
Grandey said he doesn't see the Fukushima crisis as having the same effect on public attitudes toward nuclear power that the Three Mile Island and Chornobyl incidents had decades ago.
Back then, other fuel sources like coal and oil were easier fall-back options than they are today now that climate change is a consideration.
"Energy requirements are growing dramatically and governments, which are building and planning new nuclear power installations, have for the most part refrained from engaging in knee-jerk reactions," he said.
"Yes, they are calmly talking about a pause to assess both existing and planned nuclear generation facilities so lessons learned from Fukushima can be understood and applied. But for the most part they are talking of this period merely being a pause."
Earlier Friday, Cameco said lower electricity prices and higher costs squeezed its first-quarter profits, and that it is lowering its 2011 revenue forecasts because of the high Canadian dollar.
Net earnings dropped 36 per cent from $143-million to $91-million in the first three months of 2011. The profits amounted to 23 cents per share, compared with 36 cents in the same quarter last year.
Adjusted earnings per share, which strip out the effects of one-time items, were $85-million, or 21 cents per share, compared with $112-million, or 28 cents per share in the first quarter of 2010.
The earnings missed the average analyst estimate of 31 cents per share.
Revenues declined six per cent to $454-million, well below expectations of $540-million.
Cameco said lower prices affected its electricity revenues from the Bruce plant and fuel services businesses, as did lower uranium sales.
The miner expects 2011 uranium revenues to increase by 10 to 15 per cent over least year, a pullback from its previous target of between 15 and 20 per cent. The reduction is due to a strengthening Canadian dollar, which has the effect of squeezing exports.
Consolidated revenues now are expected to increase by five to 10 per cent over 2010, versus its previous forecast of between 10 and 15 per cent.
Cameco is the world's biggest uranium miner, with operations in North America and internationally that help supply fuel to the world's nuclear power plants.
The company is also a partner in the Bruce Nuclear Generating Station on the shores of Lake Huron about 250 kilometres northwest of Toronto. Other partners include natural gas shipper and pipeline operator TransCanada Corp., the OMERS municipal workers' pension fund in Ontario and a union group.
Cameco shares were down 22 cents at $27.46 in afternoon trading on the Toronto Stock Exchange.