Tailwinds for nuclear

Lisa Raitt: Thank you for tuning in to The Raitt Stuff. I’m your host Lisa Raitt, former cabinet minister in Stephen Harper’s government from 2008 to 2015. I’m here now at CIBC Capital Markets and in this podcast, I’m going to share insights on current hot topics in the areas of public policy, politics and business with some guests along the way. And welcome back to The Right Stuff. We’re going to continue on talking a little bit about a nuclear, but this time we’re going to talk about it from its origin, something that Canada is very blessed to have is very rich in, and that’s uranium. And along with the word uranium, you can’t go very far without knowing the company. Cameco And today I have the great pleasure of having the president and CEO Tim Gitzel of Cameco with us to talk about uranium, nuclear power, small modular reactors and maybe a little bit of what’s going on in Russia, in Ukraine, in the United States, in the market, too. So I hope you enjoy our conversation. And as always, if you have any questions that you want to ask that you’d like for us to address in a future podcast, please just send them through to my email. Great to have you, Tim. Thank you so much for coming on the podcast today.

Tim Gitzel: Lisa, it’s a great pleasure to join you. Great to see you. I remember the days when you visited our offices here in Saskatoon. And just a real pleasure to talk to you today.

Lisa Raitt: I think, honestly, that when I became Minister of Natural Resources, the first place that I went to was your Port Hope Place, where we were talking about the fuel supplies there for sale. So it was yeah, I go way back with Cameco in general.

Tim Gitzel: Port Hope still running, running almost full speed. Now we’ve got some real tailwinds for nuclear as we’ll talk about today. And so Port Hope going strong.

Lisa Raitt: Excellent. Why don’t you tell me a little bit then about what’s happening domestically. Where are you looking forward to new operations, what’s happening with your current operations? Because obviously everybody knows that nuclear is going to be an incredibly important part of energy transition. So that must be great news for you and just let us know what’s going on here in Canada.

Tim Gitzel: Yeah, thanks, Lisa. Well, you know, we’ve really got some tailwinds over the past couple of years. We went through a really difficult period post Fukushima. People took another look at nuclear power. Some countries moved away from nuclear power almost a decade of tough times. And so we had a lot of uranium into the market. We had to make some really tough decisions here in Canada. We shuttered some of our production, shut down some of our mines, really some tough medicine we had to take. So, you know, that was post 2011. I would say in the last 2 to 3 years, we’ve really got some tailwinds. You talk climate change, climate crisis, climate catastrophe, global warming, the race to net zero. And I think most people who look at it seriously would say we’re not getting to any of those without nuclear power. And so that’s really given us some strong tailwinds, enough confidence to restart some of our mines here in Canada. The discussions going on, we’re looking to decarbonise, having to pay for carbon now. And so provinces are looking at their energy supplies and saying, where is it going to come from? The best story I always say in the world is right in Ontario, where you’re 60, 65% nuclear powered. I don’t think people know that six out of the ten light bulbs in your office are nuclear power. And looking at extending the lives, Bruce Power, OPG, extending the lives of their units. And now we’re talking about seminars and small modular reactors. So not the big maybe six, seven, 800,000 megawatt units, but 50 to 300 megawatt units that can be more localised and serve different areas. So yeah, some real, some real tailwinds as I say, real good support us. I spent a lot of time in the US. We’re really Cameco and the nuclear industry getting a lot of support from the US government. So we’re busy. Lisa Lots going on.

Lisa Raitt: And it’s a lot better than when it was considered whether or not uranium was going to be part of a national security issue between Canada and the United States. That must have been a little bit scary when that was being studied as to whether or not you were going to be able to bring uranium into the States.

Tim Gitzel: Yeah, that was one of those Section 232 pieces that the US government put forward. You know, I don’t think it was ever really serious, but we spent two years of our lives in Washington kind of fighting back on that and say that doesn’t even make sense. You know, the US said just to give you some numbers, the US has about 94 reactors. They consume about £45 million of uranium per year. They produce zero. And so to exclude Canadian or put tariffs in Canadian made no sense at all. And so we’re a big supplier there and eventually that went away.

Lisa Raitt: So Tim here at CIBC, one of the roles I have is I’m the chair of the Reconciliation Action Committee, and I know from my past experience with Cameco that you work diligently with Indigenous communities. Can you tell me a little bit about the success story that you’ve had and I’m going to be accused of of letting you have an actual commercial here, but I think it deserves to have some light shone upon the fact that you are a success story in terms of indigenous communities and the work that you’ve put in the last 30 years.

Tim Gitzel: It really is a success story and I give credit to my predecessors here. I’ve been in the chair for about 11 years, but there were several before me that really focussed on the Indigenous file. So our operations, the big minds, we have world class large mines up in northern Saskatchewan. We’re 500 miles north of Saskatoon where really we’re in the centre of some Indigenous communities. And so we said from the beginning we have to get them involved, we have to get them involved from an employment point of view. We’re going to give them jobs, we’re going to give them business opportunities, we’re going to consult with them. We’re going to let them do environmental monitoring at our sites. And we’ve done that. And we’ve kept up that promise for for three or four decades now. Today, I was just looking at the numbers this morning, our workforce up north, about 55% indigenous. And so, I mean, we’re the largest industrial employer of indigenous people in Canada. We’re very proud of that. We find it to be a competitive advantage for us that we have a built in workforce up north. They’re loyal, they’re hardworking, and they’ll stick with us and they won’t chase around over to the oilsands or down to potash. They’ll stick with us. So it’s been something very, very important to us. It’ll continue to be. We’ve had no issues. We have a great partnership with them and we’re very proud of that.

Lisa Raitt: That’s great. Moving on to the world, I think you’re on the board of the World Nuclear Association or you may be chair of the Board of the World Nuclear Association. Now, what is going on in terms of the market worldwide? I know Canada, of course, will supply to the United States, but what’s happening in terms of the markets developing in in Europe, in Asia, have there been any big changes in the past number of years and I guess tangentially what’s going on with Russia and Ukraine?

Tim Gitzel: Yeah, lots to unpack there for sure. So, yes, I have I just finished my role as chair of the World Nuclear Association. I’ve been on the board there for probably over 20 years now. And it’s a fascinating piece for I’m not a kid anymore, but a kid from Meadow Lake, Saskatchewan, to sit at that table with all of these countries, I have to pinch myself sometimes. But, you know, it’s really a clearinghouse for nuclear. And and let me start first with the Russia situation that is really complicated. And we’re having special meetings now on Russia. Russia has been a big part of the World Nuclear Association. They supply about 30 or 35% of the nuclear fuel to reactors around the world, everywhere. And all of a sudden this comes up and now that’s changing and changing very fast. So countries are a bit concerned about where their fuel supply is going to come from going forward. So maybe better news for some of us. We’re getting lots of phone calls, but it’s just not a good situation for the world. And so we’re working through that. We’re watching what sanctions are coming from Canada and the US and other countries. So it’s on our plate every morning.

Tim Gitzel: The other piece is just the just nuclear power around the world. I mean, we’re seeing growth now that we haven’t seen. We probably saw it in the early 2000s before the Fukushima accident, where many countries around the world are talking nuclear and countries that had walked away from nuclear. We could talk about Germany, for instance, talking about closing down all their plants. They’re almost there now. They’re having a change of heart. You know, when you’re 40% or 50% reliant on Russian gas, you have to think again about what you like and don’t like. Yesterday, Boris Johnson in the UK said We’ve got to double our commitment to nuclear France committing to building 16 new, new units and I could go on and on smears everywhere. I’m heading to Czech Republic on Saturday with a US delegation where they’re building new reactors and they want uranium from Canada. And so it’s it’s pretty exciting for us now. But you know, in this world, as I say, of climate change and where we have to over time, over time wean ourselves, I guess, of fossil fuels, you have to have nuclear in the toolbox. And I think many, many countries understand that.

Lisa Raitt: There’s all kinds of different companies out there that have come up with their own design around nuclear plants. You know, we had the CANDU we had what happens in France with Areva and Westinghouse in the States. And the same thing is happening with SMR. So there’s different companies involved. Are you agnostic in terms of which companies that you can work with, meaning that your uranium can pretty much go anywhere? It’s it’s how it’s processed?

Tim Gitzel: Yeah, we are pretty much agnostic because they all really 90% of them use use uranium in the process. It gets changed into different forms for the different reactors, but we would be involved. And so we are involved in fact, we’re involved with the OPG, with their SMR that they’re building a Darlington. We’d really like to supply fuel to them here in Saskatchewan. Scott Moe. Talking about building units here at the end of the decade to replace coal. And so there’s been a bit of a glitch with the Russian situation over the past couple of weeks. We were expecting a lot of the initial course, initial fuel for some of these SMRs to come from Russia. For the first decade or so, that’s obviously not going to happen now. And so some of the companies are scrambling a bit to see where they’ll get this high assay, low enriched fuel and it’s called called Hallyu. And so that’s going on. But for some of the other models, like the one the LPG folks have picked, the GE, they use just traditional fuel. And so they’ll be able to access that out of the US and hopefully soon out of Canada.

Lisa Raitt: That’d be great. You mentioned Boris Johnson and the United Kingdom. They’ve done something really interesting in terms of making it easier to invest and build nuclear plants because they’ve made some financing changes or they’re allowing people to be able to get money out earlier in the process. And they’re using their banking system, their capital market system to make it easier. We have a different kind of thing happening here in Canada, where recently, while this week the Canadian government is selling their green bonds and nuclear has been excluded as something that is considered green. Were you surprised?

Tim Gitzel: Yeah, and disappointed. I’d say that just really didn’t make sense to me and I’m talking for me now. But you know, the government from time to time has been supportive of. Seamus O’Regan Very, very supportive. When he was the Minister, even the Prime Minister at COP 26 said We need nuclear in the toolbox. We’ve seen the Federal Government commit funds to different projects, different technologies, and then they come up with a green bond and put us in the exclusion category with other unnamed unmentionables that you don’t want to be with really. And so I don’t get it. It doesn’t make sense. We saw our good partners, Bruce Power, go out to the capital markets with a green bond. Not two months ago, they were looking for, I think, 500 million. I think there were seven times oversubscribed. I don’t know how you can jive those two things. The Canadian government comes out and excludes nuclear. So yeah, very disappointing, I’d have to say.

Lisa Raitt: Lisa, and that’s not the way it is on the world scene and the world seeing nuclear is being accepted, I think in the taxonomy as being part of Green. I know there’s pushback on it, but I think so far so good.

Tim Gitzel: Yeah, Europe just came out just after Christmas and right in the new year and announced it was a big debate and a lot of discussion in some countries for some against all of this pre Russia remember Russia’s changed the movie here when you know the free gas coming from Russia not so clear anymore and people have to make changes. But even before that, the European Commission looked at nuclear energy and included it in their clean energy taxonomy. And so it’s disappointing. Maybe they’ll have another look at it. I’m hoping they will. Yeah.

Lisa Raitt: That’s great. I could talk to you for a long time, Tim. I really appreciate it. I’ve always had an affection for nuclear from my time, as I said when I was minister, and I’m really happy to see that it’s flourishing again. You may remember we called it the nuclear renaissance back in 082 ten. That was the great time. But now I think this one’s got legs and it’s going to stick. And the SMRs are a big change. They’re a channel changer for a lot of northern communities, a lot of mines. I want to thank you very much for sticking with it for so long through the highs and the lows and coming on today and giving us an idea as to what we can expect for the future. And who knows, tomorrow could be a different day, but for now it’s looking pretty good.

Tim Gitzel: Yeah. Thank you, Lisa. It’s absolutely a pleasure. I’ll join you any time. And thank you for your support of our company and our industry.

Lisa Raitt: You bet. Thanks a lot. And that’s it for this week, everybody. Thanks so much for tuning in. Now, if you have any questions or comments or even requests on topics to discuss, drop me a line at lisa.raitt@cibc.com. Your interactions actually will make this better. I’m your host, Lisa Raitt, and this has been The Raitt Stuff. I’ll talk to you next week.

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