Talks among the Russian Ministry of Atomic Energy, Canadian uranium producer Cameco (CCO-T) and U.S. uranium dealer Nukem have been suspended, jeopardizing a deal under which the Western companies would have bought about US$4-billion worth of uranium from dismantled nuclear weapons.
Cameco and Nukem walked out of the negotiations when the Ministry could not deliver assurances that the contract would be enforceable for its full term of 10 years. Cameco said the Ministry had also been unable to guarantee Russian government approval for the sale.
The parties had earlier signed a memorandum of agreement under which the Russian government had undertaken to model the contract on provisions the U.S. and Russian governments had agreed to in 1993. The provisions were to govern the use of uranium from decommissioned warheads as nuclear fuel.
Two companies in which the Ministry is a part-owner — Global Nuclear Services and Supply (GNSS), and Techsnabexport — had proposed assurances on different patterns, but Cameco and Nukem found the terms of assurance were not satisfactory. The Ministry of Atomic Energy now plans to sell the uranium on the world market using GNSS and Techsnabexport as agents.
The markets reacted by bidding Cameco shares down $4 on Dec. 12, to a closing price of $42.50.
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