(Rewrites throughout with analysts' views, adds comment from
company and the union)
By Rod Nickel
WINNIPEG, Manitoba Aug 27 Canadian uranium
miner Cameco Corp will shut the world's biggest
uranium mine at McArthur River, Saskatchewan on Saturday,
barring a last-minute labor settlement, after the United
Steelworkers union said workers would go on strike.
Cameco on Wednesday said it issued a lockout notice at the
mine and the Key Lake mill. The work stoppage would involve 535
unionized workers at the two sites.
A shutdown would reduce some of the world's excess uranium
supply, Cantor Fitzgerald analyst Rob Chang said in a note. But
it may weaken Cameco's earnings as the company is forced to buy
uranium from higher-cost sources, Chang said.
Cameco shares fell 2.8 percent in Toronto and 2.2 percent in
New York in morning trading.
Uranium spot prices are near a nine-year low, as Japan,
previously a major producer of nuclear-fueled electricity, has
been slow to approve reactor re-starts after an earthquake and
tsunami destroyed the Fukushima Daiichi nuclear power station in
Saskatoon, Saskatchewan-based Cameco, the world's
third-largest uranium miner, said a labor disruption would not
affect the company's 2014 uranium delivery commitments, as it
can draw on a variety of supply sources.
McArthur River's capacity of 18 million pounds of uranium
annually represents 12 percent of global mine supply, said BMO
Capital Markets analyst Edward Sterck, who forecasts an
oversupply of uranium through 2017.
France's Areva SA owns minority stakes in both
the McArthur River mine and the Key Lake mill, which processes
ore from McArthur.
In response to the union's strike notice, Cameco issued a
lockout notice effective at 12:01 a.m. Central time (0501 GMT)
on Saturday. Cameco spokesman Gord Struthers declined to say
what the outstanding issues are as talks continue with the
union. The previous contract expired on Dec. 31, 2013.
Mike Pulak, a United Steelworkers representative in
Saskatoon for Local 8914, said the parties will continue to meet
to try and resolve the issues.
The last strike at a Cameco site was in 2009, when United
Steelworkers members walked off the job at a fuel manufacturing
facility in Ontario. It lasted about three months.
(Editing by Grant McCool)