By Stephen Bell
PERTH--Canada's Cameco Corp. (CCJ) expects Australian regulators
to decide on its proposed Kintyre uranium mine within weeks, but
will likely delay construction after prices of the nuclear fuel
slumped to nine-year lows.
Brian Reilly, managing director of Cameco Australia, said
Wednesday he expects Western Australia state's Environmental
Protection Authority to release a report into the project soon.
"The EPA is sitting on the report and recommendations--we
anticipate seeing that released publicly within the next few
weeks," Mr Reilly told The Wall Street Journal on the sidelines of
a uranium conference in Perth.
The regulator will make a recommendation to state and federal
ministers, who will then make a final decision on whether the
project can go ahead.
Mr. Reilly said Cameco hopes to "be in a position by the end of
this year to have this project approved."
However, Cameco would need uranium prices to recover sharply
before starting construction of the mine. It would also look to
discover more uranium reserves at the mine site.
In mid-2012, Cameco deferred development of Kintyre due to a
collapse in the uranium price in the wake of the Fukushima nuclear
accident in Japan. At the time, Cameco said the project likely
wouldn't be viable if uranium prices fell below US$67 a pound.
Spot uranium prices are currently around US$28 a pound because
of a slower-than expected restart of Japanese nuclear reactors
idled soon after the Fukushima crisis. There has also been a
build-up in global uranium inventories as nuclear facilities
recycle more fuel.
Still, Cameco is continuing technical and exploration work at
Kintyre in the hope of lowering its construction and operating
costs, Mr. Reilly said.
While the medium-term outlook for uranium is weak, Mr. Reilly
saw a much brighter future as Asian countries such as China and
India use more nuclear power.
"This is not pie in the sky - this is growth that we haven't
seen since the 1970s," he said.
Cameco purchased a second Australian uranium project, Yeelirrie,
from BHP Billiton Ltd. (BHP) in 2012 at a cost of US$452
million.
Despite being a much bigger deposit than Kintyre, Yeelirrie is
"less advanced" from a technical and regulatory standpoint, he
said.
-Write to Stephen Bell at stephen.bell@wsj.com
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