Cameco has announced it is suspending production at its Rabbit Lake operation in northern Saskatchewan.
The changes are expected to result in a reduction of about 500 positions at Rabbit Lake, including employees and long-term contractors.
The operational changes announced today include the curtailing of production at Cameco Resources’ US operations by deferring wellfield development, affecting 85 positions.
President and CEO Tim Gitzel says continued depressed market conditions do not support the operating and capital costs needed to sustain production at Rabbit Lake and the US operations.
Cameco and its US subsidiaries say they are working with employees at the affected operations to ensure a safe and orderly implementation of the decisions.
CEO Tim Gitzel was in Rabbit Lake on Thursday to inform the employees there directly.
“This is tough, it was a tough day and I wanted to be standing with them personally when I informed them of our decision. It was a difficult day for Cameco and the uranium industry, but we will work through it.”
According to a release, the Rabbit Lake operation will be placed in a safe care and maintenance state allowing Cameco the option to resume production when market conditions significantly improve.
Gitzel says they are projecting a “lower for longer” scenario when it comes to uranium prices.
Cameco CEO Tim Gitzel speaking to reporters at Cameco headquarters in Saskatoon on Thursday night.
Cameco says it will offer affected employees exit packages. Where possible, the company also says it will consider alternatives such as relocation to other Cameco facilities and job sharing options as part of its effort to minimize the impact on people and surrounding communities.
According to the company, a workforce of about 150 people will be required to maintain the facilities and sustain environmental monitoring and reclamation activities at Rabbit Lake.
Half of the employees at the operation were from northern communities.
“We will work very hard with those employees to try and transition them to other jobs in Cameco if we can… we will be very compassionate and do what we can to help those people,” says Gitzel.
The Cameco CEO also says he has been in contact with the Chiefs of the Athabasca region.
“I explained to them what we were doing and they were very understanding and willing to work with us because they see it as a long term relationship,” says Gitzel. “Better days are ahead, we believe in the industry we are in, we have seen the ups and downs and right now it’s down, but we will come back again and these communities will prosper.”
Cameco says work to transition the operation to care and maintenance will begin immediately and is expected to be completed by the end of August.
It also says workforce adjustments will occur over the next four months.
Gitzel says there will be no changes in any other Cameco operations.