TORONTO (Reuters) - Cameco Corp (CCO.TO) remains confident that the long-term outlook for uranium is solid despite global anxiety over radiation from an earthquake-crippled nuclear plant in Japan, Chief Executive Jerry Grandey said on Monday.
Speaking to Reuters in an exclusive interview at the Mining and Steel Summit, Grandey said that while the so-called nuclear renaissance will be slowed by the crisis in Japan, more uranium will be needed in the next few years to fuel reactors already online and under construction.
Cameco, the world’s No. 2 uranium producer, plans to double production to 40 million pounds a year by 2018. With contracts in place through 2017, the crisis will not have a material impact on the company’s long-term outlook, Grandey said.
“We see no reason to slow down the doubling of production,” he said. “Even if there is a pause or slowdown (in the nuclear plant buildout) as expected.”
He said that while China has frozen approvals of all new nuclear power projects, he believes the country will still ramp up its nuclear output to at least 70 gigawatts from its current capacity of 11 gigawatts.
“I still don’t see, even with a slight pause, why that wouldn’t be achieved,” Grandey said. “If they achieve by 2020 only 40 gigawatts, which is what’s under construction and what’s operating, they still would require 20 million pounds a year.”
Current global uranium demand is about 180 million pounds a year, with mine output accounting for about 140 million pounds of that. The remainder comes from stockpiles and downgraded weapons-grade uranium.
“My sense is, given all those pieces, there isn’t going to be much of a change in the supply and demand imbalance that we have, and in the need for new projects to come online in the next decade.”
Grandey said he expects Cameco to meet its revenue forecasts for 2011. The company said last month that it expects revenues to rise by 15 to 20 percent this year.
Shares of Cameco closed up 7.35 percent at C$31.09 on Monday on the Toronto Stock Exchange, after tumbling over 21 percent last week.
Additional reporting by Euan Rocha, Matt Daily, Steve James, Mike Erman, Scott Disavino; editing by Peter Galloway