Cameco closes deal to buy Finnish uranium

08 February 2011

Cameco has signed two exclusive agreements with Talvivaara Mining to buy uranium produced as a by-product at the Sotkamo nickel-zinc mine in Finland.


Talvivaara processing plant (Talvivaara) 
Talvivaara's existing processing plant (Image: Talvivaara)
Talvivaara plans to start work this year on an extraction circuit to recover uranium as a by-product from its mining operations at Sotkamo, completing it in 2012. The first of two offtake agreements it has signed with Cameco will see the Canadian uranium producer provide an upfront investment of up to $60 million to cover the construction costs of the extraction circuit, with the investment being repaid through the initial deliveries of concentrate from the plant.
Once the capital is repaid, a second agreement will see Cameco purchase Sotkamo's uranium output for a price based on a formula related to market prices at the time of delivery. The second agreement will expire at the end of 2027. Cameco will take ownership of all the uranium produced at the Sotkamo site and will have the sole right to market the product to its customers. The mine is expected to produce 350 tonnes of uranium per year.
Cameco CEO Jerry Grandey noted that the company already supplies uranium fuel to Finnish utilities, and said the agreements fitted with Cameco's strategic goal to double uranium production from its existing assets by 2018. "Our deal with Talvivaara will provide Cameco with an additional source of uranium supply over and above what we expect to produce from our properties," he said. "The fact that uranium will be produced in Finland for the first time in 50 years meshes well with Finland's plan to produce an increasing percentage of its domestic electricity from clean nuclear power in the years ahead," he added.
Talvivaara CEO Pekka Perä was equally upbeat. Paying tribute to the Canadian company's long-standing international uranium production experience, he expressed his pleasure at the partnership. "It makes sense to extract the uranium in the same way as we do with our other metals," he said.
Uranium is present in the Sotkamo bedrock at very low concentrations, averaging only 0.0015-0.0020%. Small concentrations of uranium, around 25 milligrams per litre, leach into solution during the bioheapleaching process used to recover the mine's main products of nickel, zinc, copper and cobalt, and it is this uranium that will be recovered in the extraction circuit to be built later this year. Cameco has already been involved in providing technical assistance towards the design, construction, commissioning and operation of the extraction circuit, the Canadian company notes.
Talvivaara is in the process of obtaining the necessary permits from Finnish regulators for the construction and operation of the uranium extraction circuit to go ahead. An environmental impact assessment process is ongoing at the site, and preparations for the submission of an environmental permit for uranium extraction are under way. The company submitted an application to the country's Ministry of Employment and Economy for a permit to extract by-product uranium in April 2010.
The uranium offtake agreements between Talvivaara and Cameco are subject to ratification by the Euratom Supply Agency and the European Commission, as well as approval by the Finnish authorities. The two companies expect Euratom approval to be granted "within a few months."
The Talvivaara deposits comprise one of the largest known sulphide nickel resources in Europe, and the orebody is sufficient to support expected production for at least 46 years. Talvivaara expects to be able to produce a steady 350 tU per year from the Sotkamo mine, although the company notes that uranium production capacity could well be increased in line with its intention to increase nickel and zinc production at the mine using its unique bioheapleaching process.
Finland's four operating nuclear reactors provide some 30% of the nation's electricity. A fifth unit, Olkiluoto 3, is under construction and expected to enter service in 2013. Plans are moving ahead for the possible construction of a further two reactors. At the end of 2010, Talvivaara became a shareholder in Fennovoima, which is planning to build one of the new reactors at one of two possible sites on Finland's west coast.


Researched and written

by World Nuclear News