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Cameco

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This article is about the uranium company. For other uses, see Cameco (disambiguation).
Cameco Corporation
FormerlyCanadian Mining and Energy Corporation
Company typePublic
IndustryMining, energy
Predecessors
Founded1988; 36 years ago (1988)
HeadquartersSaskatoon, Saskatchewan, Canada
Key people
Ian Bruce (chairman)
Tim Gitzel (president & CEO)
ProductsUranium, electricity
RevenueDecrease CA$1.475 billion (2021)[1]
Number of employees
2,640 (2023)
Websitecameco.com

Cameco Corporation (formerly Canadian Mining and Energy Corporation) is the world's largest publicly traded uranium company, based in Saskatoon, Saskatchewan, Canada.[2] In 2015, it was the world's second largest uranium producer, accounting for 18% of world production.[3][4]

History

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The Canadian Mining and Energy Corporation was formed in 1988 by the merger and privatization of two Crown corporations: the federally owned Eldorado Nuclear Limited (known previously as Eldorado Mining and Refining Limited) and Saskatchewan-based Saskatchewan Mining Development Corporation (SMDC). The name was later shortened to "Cameco Corporation".

The new company was initially owned 62% by the provincial government and 38% by the federal government. The initial public offering (IPO) for 20% of the company was conducted in July, 1991. Government ownership of the company decreased over the next eleven years, with full privatization occurring in February, 2002.

In 1996, Cameco acquired Power Resources Inc., the largest uranium producer in the United States. This was followed in 1998 by the acquisition of Canadian-based Uranerz Exploration and Mining Limited and Uranerz U.S.A., Inc.

In 2008, Cameco purchased a 24% stake in Global Laser Enrichment (GLE), the exclusive licensee of the proprietary Separation of Isotopes by Laser Excitation (SILEX) technology developed by SILEX Systems Limited. GLE is developing this third-generation uranium enrichment technology. In 2021, Cameco and SILEX purchased GE-Hitachi's 76% stake in GLE, leaving Cameco with 49% of the company.[5]

In 2011, Cameco signed an agreement with Talvivaara Mining Company whereby Cameco would pay US$60 million to construct a uranium extraction circuit at the Talvivaara nickel-zinc mine in Sotkamo, Finland. Talvivaara would then pay back the initial construction costs in the form of uranium concentrate; once the initial costs were paid Cameco would continue to purchase the uranium concentrate at a pricing formula based on market price on the day of delivery.[6]

In 2012, it acquired a nuclear fuel intermediary, Nukem Energy.[7]

In 2016, Cameco suspended operations at its Rabbit Lake mine, due to low uranium prices.[8] In 2017, it suspended operations for at least 10 months at its McArthur River mine and Key Lake mill,[9] converting that to an indefinite shutdown in 2018 involving the layoff of about 700 staff.[10]

In October 2022, Cameco along with Brookfield Renewable Partners announced the acquisition of Westinghouse Electric Company in a US$7.9 billion deal including debt. Cameco will own a 49% interest in the company as part of the deal.[11][2] The acquisition was completed in November 2023.[12]

Operations

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Cameco operates uranium mines in North America and Kazakhstan, including McArthur River-Key Lake, the world's largest uranium producer, and Cigar Lake, the world's highest grade uranium mine, both in Saskatchewan. Other operations in Saskatchewan include a mine and mill at Rabbit Lake, currently in care and maintenance.

In the United States, Cameco operates uranium mines in the states of Nebraska and Wyoming through its US subsidiary Cameco Resources Inc. Cameco Resources was formed in 2007 through a restructuring of two wholly owned subsidiaries, Power Resources Inc. (Wyoming) and Crow Butte Resources, Inc. (Nebraska).

In the province of Ontario, Cameco operates a uranium refinery in Blind River and a uranium conversion facility in Port Hope, which has faced opposition from some community groups.[13][14] Cameco is the exclusive fuel supplier to Bruce Power, which supplies 30% of Ontario's electricity through its nuclear generating plant.[15] It used to own part of Bruce Power, but it sold its interest in 2014.[16]

In 2004, Cameco spun off its gold mining operations in Kyrgyzstan, Mongolia and the USA to a newly formed public company, Centerra Gold. Cameco divested its remaining interest in Centerra on December 30, 2009.[17]

In January 2011, Cameco participated in the clean up of a ship-board uranium concentrate spill on the MCP Altona that had occurred on December 23, 2010.[18]

Mines
Producing
Name Location
Smith Ranch-Highland Wyoming, United States
Cigar Lake Saskatchewan, Canada
Crow Butte Nebraska, United States
Inkai Kazakhstan
McArthur River Saskatchewan, Canada
Suspended
Eagle Point (Rabbit Lake) Saskatchewan, Canada
Mills
Name Location
Key Lake Saskatchewan, Canada
Rabbit Lake Saskatchewan, Canada
Fuel Production
Name Location
Port Hope conversion facility Ontario, Canada
Blind River refinery Ontario, Canada

Tax Dispute

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The Canadian Revenue Agency (CRA) claimed Cameco's tax scheme started in 1999. Cameco created a marketing subsidiary in Zug, Switzerland, and drafted a 17-year agreement to supply uranium to the Swiss subsidiary at a rate of $10 a pound. The corporate tax rate in Switzerland is estimated to be at around 10 per cent. The Canadian corporate rate estimated to be at least 27 per cent.[19] By having the Swiss subsidiary purchase the uranium first, and then selling it elsewhere, Cameco was able to pay the Canadian tax rate for the first $10 and the remainder at the Swiss tax rate.

In 2012, the Canadian research firm Veritas Investment Research estimated that Cameco paid $36 million in cash taxes on $680 million pre-tax cash flow from operations, or at a rate of 5 per cent. During the previous six-year period, the Swiss subsidiary claimed $4.3 billion in profits, while its Canadian operation claimed a loss of $1.3 billion. Cameco had also established another subsidiary in Barbados, a known tax haven. The operations conducted in this subsidiary were not clear, but court documents showed Cameco paid the Barbados subsidiary 50 per cent of its Swiss subsidiary's pre-tax profits in 2005.[20]

The CRA claimed that the Swiss subsidiary profits had to be taxed at Canadian rates, because these subsidiaries did not carry out any real business activities and were just paper companies. It wanted Cameco to pay $2.1 billion in back taxes. Cameco argued that its offshore structures were legitimate and permitted by Canadian tax laws.[20]

In 2018, a judge from the Tax Court of Canada, as well 3 judges from the Federal Court of Appeal ruled in Cameco's favour and found the manner it acted in to be lawful.[21][22] The Tax Court also awarded the company with $10.25 million in legal fees and up to $17.9 million in disbursements for costs incurred. The CRA looked for a final appeal from the Supreme Court of Canada, but on February 18, 2021, the court rejected the appeal.[23] It upheld the ruling from the previous judges, and this left the CRA with no further means to pursue this case.

See also

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References

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  1. ^ "Annual Report 2021" (PDF). p. 32. Retrieved 2023-01-18.
  2. ^ a b Hardison, Kathryn (11 October 2022). "Cameco, Brookfield Renewable Partners to Buy Westinghouse Electric for $7.88 Billion". The Wall Street Journal.
  3. ^ "2015 Annual Report". Cameco Corporation. Retrieved 15 November 2016.
  4. ^ "World Uranium Mining". World Nuclear Association. May 2015. Archived from the original on 2014-06-13. Retrieved 2016-04-26.
  5. ^ "Our History - Global Laser Enrichment". Global Laser Enrichment. Retrieved 2022-09-14.
  6. ^ "Cameco logs net earnings of $207 million in Q4 on $673 in revenue". Canadian Press. Retrieved 2011-02-12.[permanent dead link]
  7. ^ "Cameco to buy Nukem Energy". World Nuclear News. 2012-05-14. Retrieved 2012-05-15.
  8. ^ "Cameco Rallies on View Shutting Mine Will Bolster Uranium Prices". Bloomberg.com. 2016-04-22. Retrieved 2017-12-29.
  9. ^ "'There was no indication this was going to happen': Union says workers shocked by temporary shutdowns and layoffs at Cameco uranium operations". Saskatoon StarPhoenix. 2017-11-09. Retrieved 2017-12-29.
  10. ^ "Cameco shutdown extended indefinitely". World Nuclear News. 26 July 2018. Retrieved 28 July 2018.
  11. ^ Deka, Kannaki; Kumar, Arunima (11 October 2022). "Westinghouse to be sold in $7.9-bln deal as interest in nuclear power grows". Reuters.
  12. ^ "Westinghouse Acquisition by Brookfield and Cameco Complete". 7 November 2023.
  13. ^ Port Hope Community Health Concerns Committee Archived 2012-03-17 at the Wayback Machine
  14. ^ Port Hope Families Against Radiation Exposure Archived 2009-02-06 at the Wayback Machine
  15. ^ "Cameco enters $2B deal with Ontario's Bruce Power". CBC News. Retrieved 2017-12-29.
  16. ^ "Cameco to sell stake in Bruce Power nuclear partnership to Borealis for $450M". Global News. Retrieved 2017-12-29.
  17. ^ "Cameco Announces Completion of Centerra Common Share Sale". Archived from the original on 2010-02-25. Retrieved 2010-02-01.
  18. ^ "UPDATE Jan. 24: Uranium ship out of Stuart Channel". Ladysmith Chemainus Chronicle. 2011-01-18. Retrieved 2021-10-26.
  19. ^ Leo, Geoff (September 19, 2013). "Ottawa accuses Cameco of multi-million dollar tax dodge | CBC News". CBC News. Retrieved 2023-04-21.
  20. ^ a b Livesey, Bruce (2016-04-25). "Did this company engineer the largest tax dodge in Canadian history?". Canada's National Observer. Retrieved 2023-04-21.
  21. ^ "Federal Court of Appeal has upheld Tax Court ruling challenged by CRA: Cameco | Globalnews.ca". Global News. Retrieved 2023-04-21.
  22. ^ "Ruling in Cameco tax case tied to sale of Russian uranium puts billions at stake, CRA says". financialpost. Retrieved 2023-04-21.
  23. ^ "Key takeaways from Supreme Court's termination of Cameco transfer pricing saga". BLG. Retrieved 2023-04-21.
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