Shutdown shocks Cameco workers

Firm blames low uranium prices for temporary layoff of 845 staff

Cameco Corp.’s decision to temporarily shut down two uranium operations in northern Saskatchewan, leaving around 845 people without work for at least 10 months, is shocking, according to the head of the union representing the company’s employees.

The Saskatoon-based company attributed its decision to stop production at the McArthur River mine and Key Lake mill to “unsustainably” low prices, but United Steelworkers Local 8914 interim president Denis O’Hara said workers were blindsided.

“Employees on site would be in total shock as well, because there was no indication that this was going to happen, especially to the extent of 10 months,” O’Hara said, adding that the two facilities 550 kilometres north of Saskatoon spent much of the summer shut down.

Cameco told its employees late Wednesday afternoon that 210 workers will be retained once the mine and mill are in a “safe shutdown state” by the end of January, but additional temporary layoffs could follow as it reviews corporate support for the idled operations.

“There’s just today too much uranium out there,” Cameco president and CEO Tim Gitzel said in an interview Wednesday evening, hours after what he described as “sombre” meetings at the two affected sites.

“We didn’t think adding to that was helpful. We have a good inventory of uranium at Cameco that can sustain us that we can put into profitable contracts … We can actually buy uranium cheaper than we can produce it.”

Gitzel said the company will do its “utmost to soften the blow” for the employees and contractors left without work, because it expects to need them when the mine and mill are restarted next year. O’Hara acknowledged that Cameco is a fair and compassionate employer.

At the same time, the shutdown will be especially devastating for the roughly 49 per cent of Cameco’s northern Saskatchewan employees who are from local communities, largely because there are fewer opportunities in the region, he said.

He is also worried because it’s not clear what will happen when the union’s contract expires at the end of December, O’Hara said. At the moment, preparations for collective agreement negotiations are in limbo, he added. Gitzel said negotiations will continue as planned. “This has really nothing to do with that. This is a bigger-picture issue, just the world market … We’ll continue to deal with the union in good faith. As I say, it’s a temporary suspension.”

Cameco has been struggling since the 2011 Fukushima Daiichi nuclear disaster drastically curbed demand for reactor fuel and sent prices spiralling downward, to around US$20 per pound from over US$70 per pound at the time.

The company responded by closing down its Rabbit Lake mine in northern Saskatchewan — which resulted in about 500 job losses — slashing its corporate workforce and, earlier this year, cutting about 120 positions from its remaining operations in the province.

While those and other cost-cutting measures resulted in overhead coming down by about 30 per cent, Cameco late last month reported its fourth consecutive quarterly loss. On Wednesday, it also slashed its dividend for next year to eight cents from 10 cents.

In the meantime, Gitzel said, it will be “business as usual” at McArthur River and Key Lake until the end of the year, at which point the process of halting production will begin.

O’Hara said while the union has not signed a document stating the exact length of the shutdowns, the possibility of employment insurance and benefit “top-ups” is an encouraging sign for employees.

“It’s the marketplace that put them in this position, and it’s unfortunate that they’re in this position (and) their shareholders, stockholders and employees are paying a heavy price for the low world demand for uranium.”