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Media - Uranium Industry Headlines

Below are news items that appeared in the Nuclear Market Review.

February 10, 2017
US Uranium Production Falls 13% in 2016
US Uranium Production Falls 13% in 2016
US production of uranium concentrate totaled 725,947 pounds U3O8 for the fourth quarter ended December 31, 2016, down 11 percent compared to the third quarter of last year and 16 percent higher than the same period in 2015 (Figure 1), according to data published by the US Energy Information Administration (EIA) today. Total production for the full year 2016 was just over 2.9 million pounds U3O8--13 percent less than output of approximately 3.3 million pounds in 2015, and the lowest annual US production since nearly 2.7 million pounds was produced in 2005, according to the EIA's Domestic Uranium Production Report for the 4th quarter of 2016. During the fourth quarter, uranium was produced at seven US facilities, the same number as in the third quarter of 2016, including Energy Fuel's White Mesa Mill in Utah, and six in-situ recovery (ISR) operations: Crow Butte and Smith Ranch-Highland, operated by Cameco’s US subsidiary Power Resources Inc. in Nebraska and Wyoming, respectively;  and Ur-Energy’s Lost Creek Project, Energy Fuels' Nichols Ranch Project, Uranium One’s Willow Creek Project, and the Ross Central Processing Plant at the Lance Projects, operated by Peninsula Energy's US subsidiary Strata Energy, all located in Wyoming. Cameco announced last year that its US production will be ramped down as head grades decline and development of new wellfields will be deferred in response to a weak market. Three ISR projects in Texas remain on standby. At year-end 2016, operating ISR plants held a combined annual capacity of approximately 12.2 million pounds U3O8. Seven additional ISR plants are planned in New Mexico, South Dakota, Texas, and Wyoming, according to EIA. [top]
Tohoku Electric Delays Reactor Safety Upgrades
Japan's Tohoku Electric Power Co. has delayed expected completion dates for safety upgrades at its Onagawa Unit 2 (498 MWe BWR) and Higashidori Unit 1 (1,067 MWe BWR), which, in turn, will delay the restart of the two reactors. Tohoku applied to the Nuclear Regulation Authority (NRA) for safety assessments of Onagawa Unit 2 and Higashidori Unit 1 in December 2013 and June 2014, respectively. The assessments can only be scheduled once construction of additional safety measures has been completed. The utility had planned to complete this construction work at both units by April this year. However, Tohoku said on February 7, it had reassessed the construction schedules, primarily because safety reviews by the NRA have taken longer than originally anticipated. Tohoku now expects to complete construction work at Onagawa Unit 2 in the second half of Fiscal Year (FY) 2018 (between October 2018 and March 2019). It expects construction work at Higashidori Unit 1 to be finished in FY 2019 (April 2019 to March 2020). To date, five Japanese reactors have cleared inspections confirming they meet the new regulatory safety standards; three of these have resumed operating while two others (Takahama Units 3 and 4) were removed from service in March last year due to a court injunction in response to safety concerns of local residents. An additional 19 reactors, including Onagawa Unit 2 and Higashidori Unit1, have applied to restart. [top]
Cameco Records C$62M Net Loss Due to Weak Uranium Market
Cameco Corp. reported a net loss of C$62 million (US$47 million) for the full year 2016, due to a depressed uranium market and $362 million  (US$275.5 million) in impairment charges, the Saskatoon-based miner said on February 9. The company's adjusted net earnings totaled $143 million (US$111 million) for 2016, down from $344 million (US$261.8 million) in the previous year, as revenue fell $323 million (US$245.9 million) in 2016 to $2.43 billion (US$1.85 billion). Cameco's net loss for the fourth quarter was $144 million (US$109.6 million), compared to a net loss of $10 million (US$7.6 million) for the same quarter in 2015. Cameco said it continued to focus on lowering costs and improving efficiency amid difficult uranium market conditions. The company's 2016 cash cost per pound decreased and annual production was 27 million pounds— 5 percent higher than its guidance as a result of Cigar Lake exceeding expectations. Total production was down 5 percent compared to production of 28.4 million pounds in 2015. Cameco announced last year it will reduce the workforce at the McArthur River, Key Lake, and Cigar Lake operations by 10 percent, or 120 employees, by May this year. This followed initiatives to suspend production at the Rabbit Lake operation in Canada and curtail US mining operations, as well as restructure its NUKEM business group and corporate office departments. In November last year, the company said it would shut down its McArthur River mine in northern Saskatchewan for six weeks this summer, starting during the week of July 2, 2017, to help address economic challenges facing the uranium industry. The company’s uranium sales gained 2 percent to 11.7 million pounds U3O8 in the fourth quarter, but fell 3 percent to 31.5 million pounds U3O8 for the full year. The average realized sales price for the fourth quarter was US$38.04 per pound U3O8  and $41.12 per pound for the full year, down 18 and 9 percent, respectively compared to 2015. During 2016, NUKEM delivered 7.1 million pounds of uranium at an average price of $47.90 per pound, a decrease of 3.6 million pounds and down 2 percent compared to an average price of $48.82 in 2015. In 2017, Cameco expects to produce 25.2 million pounds U3O8, with sales expected to total 30–32 million pounds.  [top]
Rio Tinto Recovers to US$4.6 Billion Profit in 2016
Increasing commodity prices led global miner Rio Tinto to a full-year profit of US$4.6 billion in 2016, a significant recovery from a $866 million loss in the previous year. The company recovered from the loss as operating cash flow and underlying earnings reached $8.5 billion and $5.1 billion, respectively last year. Rio Tinto’s energy and minerals division aided in improved results last year, with earnings that were 249 percent higher than 2015 at $610 million. The performance of the division was boosted by surging commodity prices, particularly coal. Net earnings from Rio's uranium business totaled $10 million last year. For the full year, Rio Tinto posted a 29 percent increase in its share of production from majority interests in Energy Resources of Australia’s (ERA) Ranger mine and the Rössing mine in Namibia. The company’s share of production from both mines for the full year was about 6.3 million pounds U3O8 . In 2017, Rio Tinto’s total share of production from both operations is expected to be 6.5–7.5 million pounds U3O8. [top]
SILEX Continues GLE Restructuring
Laser enrichment developer Silex Systems reported this week that restructuring activities for GE-Hitachi Global Laser Enrichment (GLE) "continue to progress constructively with a number of potential investors at advanced stages of due diligence." Silex, which is leading the restructuring plans, issued the update to clarify recent news reports related to Hitachi’s 25 percent shareholding in GLE, the exclusive licensee for the SILEX laser uranium enrichment technology. Silex confirm that the SILEX technology commercialization project continues to progress well in parallel with the GLE restructure. "Subject to various technology and economic factors, we believe the prospects for the SILEX technology remain positive," the company said on February 3. Silex and GEH recently extended the Term Sheet for the GLE restructure through to March 31, 2017, to allow the parties additional time to work toward a mutually acceptable restructure of GLE. Pursuant to the extension, Silex will continue to lead the process to attract new investors for GLE. The Term Sheet extension followed the execution of an agreement between GLE and the US Department of Energy (DOE) in November 2016, for the sale of approximately 300,000 MTU of "high assay" depleted UF6 tails to GLE for re-enrichment in potentially the world’s first laser enrichment facility that is proposed in Paducah, Kentucky, using the SILEX technology. With a number of strategic investors currently in advanced stages of due diligence activities, Silex and GEH continue to work on the formal agreement documentation that would potentially result in the sale of GEH’s 76 percent stake in GLE to Silex and other new investors. If more time is needed for the restructure, Silex said it will seek further extension of the term sheet arrangement with GEH through the second quarter of 2017. GLE continues to operate the Silex test loop facility in Wilmington, North Carolina. [top]
China's Hebei Unit 1 Scheduled for Completion by 2020
Unit 1 at the Hebei Nuclear Power Plant in China's northern Hebei province is expected to begin operating by 2020, state newspaper China Daily reported on February 9. China's state-run nuclear agency said last year it would build a nuclear power plant in the heavily polluted Hebei Province, an area near the capital city of Beijing, in an effort to reduce smog and promote cleaner power generation. The Hebei plant will house a Westinghouse AP1000 reactor, China Daily said, citing CNNP CHD Hebei Nuclear Power, a unit of China National Nuclear Power Co. Ltd. Construction of the Haixing Nuclear Power Plant, Hebei Province's first nuclear power facility, began last year in the coastal city of Cangzhou. [top]