Cameco suspends UF6 production in Port Hope

Cameco Corp. (CCO-T, CCJ-N) is suspending uranium hexafluoride (UF6) production at its plant in Port Hope until the second half of next year.

The temporary closure is due to a contract dispute with its sole supplier of hydrofluoric acid (HF).

The dispute, which started several months ago, has meant HF supplies have been unreliable and expensive and Cameco says it has already depleted the inventory of HF that it had bought on a spot basis.

Cameco, one of the world’s largest uranium producers, still anticipates fulfilling its UF6 deliveries to customers in the first half of 2009, however.

In the meantime it is actively trying to enlarge its circle of suppliers. “There are a number of suppliers in different parts of the world, and we’re in discussions with a number of them,” Lyle Krahn, Cameco’s head of media relations, told The Northern Miner. Krahn declined to name its current supplier.  

UF6 is part of the process in making fuel for nuclear reactors. After the UF6 is created, the next step is enrichment followed by fuel fabrication.

Suspending UF6 production safely will take several weeks, Cameco says. During that time, there will be as many as 100 layoffs. (Cameco employs about 440 people at the conversion facility.)

The company’s other plant at the same conversion facility producing uranium dioxide (UO2) will not be affected.   

While UF6 production is suspended, Cameco says it will refurbish fluorine cells and undertake other maintenance work at the plant. 

In Toronto, Cameco is trading at about C$21.13 per share. Over the last year the Saskatoon-based company has traded in a range of C$14.33-$44.38 per share.

In New York, Cameco is trading at about US$16.88 per share. It has a 52-week trading range of US$11.78-$44.00 per share.

Cameco has 365.7 million shares outstanding.