Vancouver: Cameco Corp., the world’s largest producer of uranium, said it had made progress in halting a flood at its Cigar Lake uranium mine that has sent the price of the raw material used in nuclear-reactor fuel to record highs.
The company has poured more than 700 cubic meters of cement into 11 of 14 planned holes to reinforce mine walls near the source of the underground flood, Cameco said today in a statement distributed by Market Wire. The flood began on 22 October when part of a tunnel collapsed in the unfinished mine in northern Canada, the Saskatoon, Saskatchewan-based company said.
Cameco had predicted the mine would supply about 10% of the world’s uranium when it reached full production in 2010. In October, it said the flood would delay construction by at least a year.
“Cameco expects to complete the work necessary to seal off the water inflow in the second quarter of 2007, provided that the current pace of drilling is maintained, and the concrete solidifies as planned,” the company said. In January, Cameco also forecast the flood would probably be contained in the second quarter.
Cigar Lake, the world’s largest untapped deposit of high- grade uranium, holds reserves of 232 million pounds of the raw material, the company said. Since the flood, the spot price of the metal has risen 51% to $85 a pound, increasing the deposit’s gross value to $19.7 billion (Rs8,855 crore).
Uranium has surged on speculation by hedge funds and other investors that there may not be enough of the metal to fuel the next generation of nuclear reactors.
Cameco said that later this month it will estimate the cost and timeframe to bring the mine into production. Cigar Lake is 660 kilometers (410 miles) north of Saskatoon.
The announcement was released after the close of trading on the Toronto Stock Exchange, where shares of Cameco fell 81 cents, or 1.9%, to C$42.44 (Rs1,602). They have risen 1% in the past year.
The flood at Cigar Lake was the third “water-inflow” event for Cameco at mines in Saskatchewan since April 2003, when a flood at the nearby McArthur River mine halted production for three months, the company said. A flood last April inundated a ventilation shaft at Cigar Lake.
Cameco’s partners at Cigar Lake include Areva Resources Canada Inc., TEPCO Resources Inc. and Idemitsu Uranium Exploration Canada Ltd.