Increasing demand for uranium puts Cameco in a good spot

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The potential of tariffs being imposed by the United States on Canadian energy imports is not dampening the optimism of leadership at Saskatoon-based Cameco Corp.

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Chief executive Tim Gitzel said Cameco dealt with tariffs on uranium during Donald Trump‘s first stint as president, so the company has taken some steps to protect itself against such costs.

“Our contracting portfolio has added some new clauses in that regard since then; any new contracts we sign then would place any of those costs back on the customers,” he said on a fourth-quarter earnings call.

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Overall, Gitzel said the company is prepared to manage a potential 10 per cent tariff.

Chief financial officer Grant Isaac said U.S. demand for uranium is inelastic and there isn’t enough produced in there to fill the gap that would be created by the absence of Canadian uranium. He added it is also likely non-tariffed uranium suppliers would increase their prices in response to tariffs being imposed.

“A 10 per cent proposed tariff from a major supply source like Canada will effectively raise the uranium price by 10 per cent,” he said.

Cameco said it earned $172 million in 2024, down from $361 million in 2023. On an adjusted basis, earnings dropped to $292 million from $383 million. The declines were attributed to its acquisition of Westinghouse Electric Co.

For the fourth quarter, Cameco said it earned $135 million, up from $80 million a year earlier, and adjusted earnings of $157 million, up from $108 million.

“Those results were strong,” Gitzel said.

In 2024, the company said it delivered 33.6 million pounds of uranium at an average price of $79.70 per pound. Cameco also said it had record production of 20.3 million package pounds of uranium from its McArthur River/Key Lake facility in northern Saskatchewan, which the company said set a world record.

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In addition to geopolitical concerns closer to home, some analysts are worried about the potential ending of the war in Ukraine and the lifting of sanctions on Russian uranium.

Gitzel suggested the best course of action is to take a wait-and-see approach since the sanctions were put in place by legislative action and would require a lengthy period to unwind.

He said the Trump administration has its own goals when it comes to energy independence, which would not be served by bringing in Russian uranium.

“Just letting Russian material flow into the U.S. runs completely counter to the new administration’s goal of onshoring,” he said.

Isaac said Russia is not a major supplier of uranium to the global market and that the market for uranium has changed since sanctions were put in place.

“There’s just simply more demand than there was before,” he said.

Isaac said Cameco is also confident about not losing any market share to the Russians because many utilities made major infrastructure investments to switch over from Russian uranium.

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“We didn’t go into any markets to replace the Russians on a spot basis or a short-term basis; we did it under long-term contracts,” he said.

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