Editorial: Eager beavers and nuclear pandas

Canada’s uranium began a whole new chapter in its history in early February with the landmark agreement to open wide the country’s uranium production and nuclear technology to customers in China, undoing decades of Cold War-ish sales restrictions.

The deal, announced on Feb. 9 in Beijing, came during Canadian Prime Minister Stephen Harper’s official visit to China, his first since the Conservative Party won majority status in Parliament.

While details of the negotiations were not released and will only be finalized after more negotiations in the coming months, the Canadian government did state that the new agreement would supplement 1994’s Agreement for Co-operation in the Peaceful Uses of Nuclear Energy, and conform to the government’s existing nuclear non-proliferation policies and obligations — i.e., that uranium and related technology be used strictly for civilian power generation.

Economically, it’s a win-win for both countries. Oft-struggling Canadian uranium and nuclear-technology companies will get to firm up a large, dependable new customer (indeed, now the world’s largest energy consumer), and China’s central planners will be able to tie down top-notch, long-term supplies of yellowcake and high-quality nuclear power technology.

Life will get a lot simpler for Canada’s largest uranium producer, Cameco, which already mines 16% of the world’s annual production. Until now, Cameco has been able to strike uranium supply contracts with Chinese customers, but has had to source almost all the material from foreign countries like Kazakhstan rather than its best mines in Canada.

Despite its many operational setbacks in the Athabasca basin in recent years, Cameco already has in place an ambitious plan to double annual production to 40 million lbs. of uranium oxide per year by 2018. This deal lets it lock in new long-term contracts that will go a long way towards making growth achievable.

Preliminary agreements signed between Cameco and Chinese customers in 2010 can now go forward, and the new exports sales to China could be worth as much as $3 billion for Cameco and other companies through 2025.

And what’s good for Cameco is obviously great news for Saskatchewan’s mining workforce (especially aboriginal workers in the north) and provincial tax base. Saskatchewan Premier Brad Wall — who already cemented his popularity in the province with his pivotal role in convincing Harper’s cabinet to go against its impulses and block the foreign takeover of Potash Corporation of Saskatchewan — hailed this latest uranium deal as a “great day for Saskatchewan” and a “very, very important development.”

Canada’s nuclear-energy industry generates $6.6 billion in annual revenue, $1.2 billion in exports each year and employs 31,000 people. About a quarter of the world’s uranium is mined in northern Saskatchewan, and planned growth in the sector hinges on increased nuclear power generation in developing countries, especially China and India — the two countries that have been targeted for loosened sales restrictions by Canadian officials in recent years.

For junior uranium explorers and developers, the various restrictions on foreign ownership of producing uranium assets in Canada has always put a damper on their ability to raise funds from foreign sources for uranium exploration in Canada. This issue hasn’t been discussed in much detail by the federal government, but the spirit of the age gives every indication these restrictions may slip for a few more countries in the years to come, to the delight of uranium company execs ever eager for new capital.

• The California Investment Conference put on by the Cambridge House folks in Palm Springs had a moment of old-school drama, with Redhill Resources chairman Graham Harris punching the Mercenary Geologist newsletter writer Mickey Fulp in the face during the conference’s morning session.

As Fulp bled heavily from a cut on his nose, Harris returned to his Redhill booth before being taken away by police, though no charges were reportedly filed at Fulp’s request. Fulp was later photographed with a large bandage on his nose and an even bigger smile on his face.

The dispute apparently stemmed from unsubstantiated accusations by Harris that Fulp had been anonymously trashing him online. The Redhill booth went unmanned for the rest of the show.