Shares in several Canadian uranium miners tumble

The world’s largest uranium miner does not expect to see a major impact from ongoing troubles at a Japanese nuclear power plant damaged in last week’s devastating earthquake and tsunami.

The world’s largest uranium miner does not expect to see a major impact from ongoing troubles at a Japanese nuclear power plant damaged in last week’s devastating earthquake and tsunami.

“The fundamentals of our industry remain positive,” Cameco Corp. chief executive Jerry Grandey told a conference call on Monday to discuss how the Japanese disaster is affecting his company.

Cameco’s (TSX:CCO) shares took a beating on the Toronto Stock Exchange on Monday, tumbling 14 per cent to $31.20 in afternoon trading.

And it wasn’t alone: fellow Canadian miner Uranium One (TSX:UUU) was down more than 27 per cent, while Denison Mines Corp. (TSX:DML) dropped more than 22 per cent.

Grandey said the drop has been “driven by emotion,” as one might expect in such a situation. However, he said he does not expect Cameco to see significant direct effects in the short or long term.

Some 18 to 20 per cent of Cameco’s shipments are bound for Japan, he said, calling the country an “important customer.”

The slide in uranium stocks comes as the international nuclear market sounds a note of extreme caution since Japan’s Fukushima Dai-ichi power plant sustained damage in last Friday’s disaster.

All three of the plant’s operational reactors have now been affected. A hydrogen explosion hit one reactor on Saturday, followed by a blast at a second rector on Monday. Later Monday, officials were struggling to prevent something similar from happening to a third reactor.

While concern has centred on the Fukushima Dai-ichi plant, near the Pacific coast, other nuclear power plants in the country were damaged, too.

Concern over nuclear safety spread to Europe as Germany temporarily halted plans to extend the life of its nuclear power plants, and neighbouring Switzerland suspended plans to build and replace its facilities. Austria’s environment minister called for atomic stress tests to make sure Europe’s nuclear facilities are “earthquake-proof.”

“It’s really called into question the nuclear renaissance,” said John Stephenson, first vice-president and portfolio manager with First Asset Funds Inc..

Stephenson suggested, however, that despite the situation in Japan it’s unlikely China will be dissuaded from building up its own nuclear power capacity.

“For everybody else, it’s definitely on the back burner for now and I think the reality is it will be for a little while,” he said.

Stephenson said he sees the uranium stock drops as a potential buying opportunity for investors who believe China’s nuclear energy demand will support the industry long term.

“They don’t have the same problems, or the same degree of problems with earthquakes as Japan does, so they’re not at risk per se to the same degree,” he said.

Some of the world’s biggest economic powerhouses were planning major nuclear expansions when the 8.9-magnitude earthquake and tsunami hit last week.

Japan, for instance, planned to add 14 plants to the 55 it already had in operation. China has been looking to add 77 facilities to its collection of 13, and India had been looking to more than double its capacity.

“I think they’re going to be re-examined, definitely,” said Marin Katusa, market strategist with Casey Research in Vancouver. “There’s going to be a lot of questions.”

While some of the plans may be scrapped, Katusa says he sees many of the nuclear expansions going ahead despite the devastation in Japan.

“They don’t have a choice. They may be delayed, but eventually nuclear is a real candidate and all of these countries are trying to increase their energy diversity, and they’re trying to grow,” he said.

The nuclear woes have been raising the profile of other energy sources. For instance, Katusa noted geothermal stocks like Ram Power Corp. (TSX:RPG) and Nevada Geothermal Power Inc. (TSXV:NGP) were up Monday.

“If you want the cheapest energy sector in the world right now, it’s geothermal. The difference between any other green energy and geothermal is geothermal’s first of all the cheapest and the most reliable,” he said.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

House sales remain hot in central Alberta with first-quarter sales nearly double last year’s numbers. Photo by PAUL COWLEY/Advocate staff
Central Alberta real estate market hot in 2021

Residential sales nearly double 2020 in first quarter

Red Deer Mayor Tara Veer gave an update on Olymel's COVID-19 situation on Wednesday. (File photo by Advocate staff).
Veer addresses rising COVID-19 cases in Red Deer

Red Deer has added nearly 200 cases of active COVID-19 cases in past week

Alberta’s chief medical officer of health Dr. Deena Hinshaw and Premier Jason Kenney say the province would look at adding additional COVID-19 measures in the coming weeks if the virus continues to spread. (Photo by Government of Alberta)
Walk-in COVID-19 vaccination clinic to open in Red Deer

Alberta adds 1,345 new cases of the virus

Innisfail RCMP are investigating a single-vehicle crash that happened west of Bowden on March 21, 2021. (File photo by Advocate staff)
RCMP investigate culturally insensitive graffiti at Sylvan Lake school

Sylvan Lake RCMP is investigating a vandalism incident. On April 17 around… Continue reading

A vial of the Medicago vaccine sits on a surface. CARe Clinic, located in Red Deer, has been selected to participate in the third phase of vaccine study. (Photo courtesy www.medicago.com)
Red Deer clinical research centre participating in plant-based COVID-19 vaccine trial

A Red Deer research centre has been selected to participate in the… Continue reading

Vancouver Canucks' Tanner Pearson, right, celebrates after scoring against Toronto Maple Leafs goalie David Rittich during the third period of an NHL hockey game in Vancouver, on Tuesday, April 20, 2021. THE CANADIAN PRESS/Darryl Dyck
Pearson, Sutter each score twice as Canucks dump Leafs 6-3

Pearson, Sutter each score twice as Canucks dump Leafs 6-3

Everton's Gylfi Sigurdsson celebrates with teammates after scoring his side's second goal during the English Premier League soccer match between Everton and Tottenham Hotspur at Goodison Park in Liverpool, England, Friday, April 16, 2021. (Peter Powell/Pool via AP)
Super League collapses after the 6 English clubs withdraw

Super League collapses after the 6 English clubs withdraw

Boston Red Sox starting pitcher Eduardo Rodriguez delivers against the Toronto Blue Jays during the first inning of a baseball game Tuesday, April 20, 2021, at Fenway Park in Boston. (AP Photo/Winslow Townson)
Bogaerts’ 3-run HR, Rodriguez lift BoSox over Blue Jays 4-2

Bogaerts’ 3-run HR, Rodriguez lift BoSox over Blue Jays 4-2

Pound says Olympic qualifying issues a concern to IOC

Pound says Olympic qualifying issues a concern to IOC

Former University of Victoria rowing coach Barney Williams is photographed in the stands during the Greater Victoria Invitational at CARSA Performance Gym at the University of Victoria in Victoria, B.C., on Friday, November 29, 2019. THE CANADIAN PRESS/Chad Hipolito
Rowing Canada sanctions former head coach of B.C. varsity women’s team

Rowing Canada sanctions former head coach of B.C. varsity women’s team

Ontario Hockey League cancels 2020-21 season as COVID-19 cases surge in province

Ontario Hockey League cancels 2020-21 season as COVID-19 cases surge in province

Lionel Desmond (front row, far right) was part of the 2nd battalion, of the Royal Canadian Regiment, based at CFB Gagetown and shown in this 2007 handout photo taken in Panjwai district in between patrol base Wilson and Masum Ghar in Afghanistan. THE CANADIAN PRESS/HO-Facebook-Trev Bungay MANDATORY CREDIT
Desmond inquiry: Veterans Affairs submits internal review after initial refusal

Desmond inquiry: Veterans Affairs submits internal review after initial refusal

FILE - In this Feb. 18, 2021 file photo State representatives gather at the Capitol, in Phoenix. Two years after Arizona lawmakers repealed a law barring any instruction on HIV or AIDS that that "promotes a homosexual lifestyle," they are close to enacting a broad remake of the state's sex education laws with a particular focus on LGBTQ issues. (AP Photo/Matt York,File)
Arizona governor vetoes strict sex education legislation

Arizona governor vetoes strict sex education legislation

Most Read