The German environment minister says delivery of German nuclear fuel to damage-prone power stations in neighboring Belgium is legal and she can't stop it, although she would if she could. Barbara Hendricks, a centre-left Social Democrat in a coalition government headed by centre-right Chancellor Angela Merkel, cites a legal opinion she commissioned from administrative law professor Wolfgang Ewer.

Germany supplies fuel to reactors at Tihange, near the German‒Belgian border, and Doel, 15 km north of the very busy port of Antwerp, whose metropolitan area houses around 1.2 million people.

The Tihange reactor pressure vessel has thousands of cracks and both power stations have had to be repeatedly switched off because of faults. (A reactor pressure vessel contains the nuclear reactor coolant, core shroud, and the reactor core.)

Seven reactors at the two locations delivered more than 37% of Belgium's electricity production in 2015, according to the International Atomic Energy Agency.

Tihange is 65 km across the border from the German city of Aachen, where 240,000 people live. Germany, Belgium and The Netherlands abut in a nearby corner.

Wolfgang Ewer states in his appraisal "that it does not have to be ensured that the exported nuclear fuels are used according to the stipulations of the German Atomic Energy Act at the destination of the export. This requirement applies only to imports" to Germany.

The Greens in the federal parliament, citing a legal opinion they commissioned from energy attorney Cornelia Ziehm, argue that the Act empowers the government to stop such exports if German interests are harmed.

The law stipulates that exportation must be licensed if nothing is known that gives rise to concerns about the reliability of the exporter, and it is assured that the nuclear fuels to be exported are not used in any way that breaches Germany's international obligations in the field of nuclear energy, or endangers its internal or external security.¹

Importation must be licensed if nothing is known that gives rise to concern about the reliability of the importer, and it is assured that the nuclear fuels to be imported are used under observance of the provisions of this law, the ordinances based on it and Germany's international obligations in the field of nuclear energy.

Citing the export rules, The Greens had demanded in a letter to Hendricks that she stop deliveries to Tihange immediately. "Almost monthly malfunctions and thousands of cracks in the reactor pressure vessel represent a danger to Germany," the Greens' parliamentary floorleader, Oliver Krischer, and their nuclear policy spokesperson Sylvia Kotting Uhl warned.

If radioactivity were to leak out, parts of the population would be hit by a worst possible accident, they said. "If Tihange 2 is not a danger to German safety, what is?" said Uhl.

The Greens failed with a parliamentary move to have fuel deliveries stopped. The co-governing Christian Democrats and Social Democrats voted them down.

Hendricks says she shares the safety concerns about the Belgian reactors and is now looking into the possibility of stopping uranium enrichment and fuel element production in Germany. But even if that were possible, it wouldn't stop operation of the Belgian power stations, which could obtain fuel elsewhere on the world market. Moreover, the ministry points out, a stop wouldn't be doable short-term.

A leading regional newspaper, Cologne's Stadtanzeiger, commented that Tihange is exemplary of the cross-border danger of nuclear power. If there was a serious incident in Tihange with a southwest wind blowing, Aachen would be hit worst. The Stadtanzeiger commentator quoted from a brochure published by local authorities giving tips for a serious nuclear malfunction "that would make your hair stand on end".

But at the end of the day, he wrote, Tihange also stands for the contrariness of politics and for minister Hendricks, who rates the reactor as a danger to German citizens but does not try to prevent its operation by stopping the delivery of German fuel rods. "No wonder thousands want to form a human chain and the local papers are getting masses of furious readers' letters," he wrote.

"If there were a serious reactor malfunction our region would have to cope with considerable effects," the crisis brochure states. No immediate damage would be expected, but in the long term, damage would include increased cancer incidence and deformities among newborns.

People should store enough food for 14 days and 28 litres of water per person. Windows should be sealed and one shouldn't leave the house. In case one had to, then only with a respiratory mask of the protective category FFP3. (A manufacturer of it states that it provides "protection from poisonous and deleterious kinds of dust, smoke, and aerosols. Oncogenic and radioactive substances or pathogens such as viruses, bacteria and fungal spores are filtered by this protective class of respirator masks.²)

"It's clear that someone publishing such advice must be expecting the worst," the Stadtanzeiger newspaper continued. "Given that, the stance of the German environment minister is puzzling. Barbara Hendricks hails from North-Rhine Westphalia [the state in which Aachen lies], she knows Tihange. For the resolute Social Democrat criticising the breakdown-reactor is a kind of point of honour. She has clearly expressed her concerns, even urging Brussels to switch off Reactor No 2."

The Federal Office for Nuclear Disposal Safety is answerable to Hendricks and licensed the direct delivery of German fuel rods. The last ones arrived on 4 March 2017.³

Local councillors in the border region feel left in the lurch by the federal government. "We represent almost 15 million people," says one of them. The closer German politicians and ordinary people are to the reactors, the greater the resistance and criticism and the less party differences matter. Worries and fear rule.

But the environment ministry in Berlin, 400 km away, cites the valid operating licence and the related contractual duty to deliver fuel rods. That might do for a law course at university, suggests the Stadtanzeiger commentator, on the theme of where does a political stance end and a politician's duty to service state agreements begin. "But it does nothing for credibility. It seems you've got to be a politician to understand the minister in her inconsistency, which borders on schizophrenia. How can she approve the delivery of fuel rods if in her own words that endangers German citizens?"

To stop delivery might have entailed contractual penalties and diplomatic strife, the commentary continued, but German politics would have stayed credible.

References:

1. www.gesetze-im-internet.de/bundesrecht/atg/gesamt.pdf

2. www.uvex-safety.com/en/products/respiratory-protection/the-interpretatio...

3. www.bfe.bund.de/EN/home/home_node.html;jsessionid=2583C8B52F8FD0B2F9B367...

The Bulletin of the Atomic Scientists has published a detailed critique of fusion power written by Dr Daniel Jassby, a former principal research physicist at the Princeton Plasma Physics Lab with 25 years experience working in areas of plasma physics and neutron production related to fusion energy.¹

Here is a summary of his main arguments.

Jassby writes:

"[U]nlike what happens in solar fusion ‒ which uses ordinary hydrogen ‒ Earth-bound fusion reactors that burn neutron-rich isotopes have byproducts that are anything but harmless: Energetic neutron streams comprise 80 percent of the fusion energy output of deuterium-tritium reactions and 35 percent of deuterium-deuterium reactions.

"Now, an energy source consisting of 80 percent energetic neutron streams may be the perfect neutron source, but it's truly bizarre that it would ever be hailed as the ideal electrical energy source. In fact, these neutron streams lead directly to four regrettable problems with nuclear energy: radiation damage to structures; radioactive waste; the need for biological shielding; and the potential for the production of weapons-grade plutonium 239 ‒ thus adding to the threat of nuclear weapons proliferation, not lessening it, as fusion proponents would have it.

"In addition, if fusion reactors are indeed feasible ‒ as assumed here ‒ they would share some of the other serious problems that plague fission reactors, including tritium release, daunting coolant demands, and high operating costs. There will also be additional drawbacks that are unique to fusion devices: the use of fuel (tritium) that is not found in nature and must be replenished by the reactor itself; and unavoidable on-site power drains that drastically reduce the electric power available for sale."

All of these problems are endemic to any type of magnetic confinement fusion or inertial confinement fusion reactor that is fueled with deuterium-tritium or deuterium alone. The deuterium-tritium reaction is favored by fusion developers. Jassby notes that tritium consumed in fusion can theoretically be fully regenerated in order to sustain the nuclear reactions, by using a lithium blanket, but full regeneration is not possible in practice for reasons explained in his article.

Jassby writes: "To make up for the inevitable shortfalls in recovering unburned tritium for use as fuel in a fusion reactor, fission reactors must continue to be used to produce sufficient supplies of tritium ‒ a situation which implies a perpetual dependence on fission reactors, with all their safety and nuclear proliferation problems. Because external tritium production is enormously expensive, it is likely instead that only fusion reactors fueled solely with deuterium can ever be practical from the viewpoint of fuel supply. This circumstance aggravates the problem of nuclear proliferation ..."

Weapons proliferation

Fusion reactors could be used to produce plutonium-239 for weapons "simply by placing natural or depleted uranium oxide at any location where neutrons of any energy are flying about" in the reactor interior or appendages to the reaction vessel.

Tritium breeding is not required in systems based on deuterium-deuterium reactions, so all the fusion neutrons are available for any use including the production of plutonium-239 for weapons ‒ hence Jassby's comment about deuterium-deuterium systems posing greater proliferation risks than deuterium-tritium systems. He writes: "In effect, the reactor transforms electrical input power into "free-agent" neutrons and tritium, so that a fusion reactor fueled with deuterium-only can be a singularly dangerous tool for nuclear proliferation."

Further, tritium itself is a proliferation risk ‒ it is used to enhance the efficiency and yield of fission bombs and the fission stages of hydrogen bombs in a process known as "boosting", and tritium is also used in the external neutron initiators for such weapons. "A reactor fueled with deuterium-tritium or deuterium-only will have an inventory of many kilograms of tritium, providing opportunities for diversion for use in nuclear weapons," Jassby writes.

It isn't mentioned in Jassby's article, but fusion has already contributed to proliferation problems even though it has yet to generate a single Watt of useful electricity. According to Khidhir Hamza, a senior nuclear scientist involved in Iraq's weapons program in the 1980s: "Iraq took full advantage of the IAEA's recommendation in the mid 1980s to start a plasma physics program for "peaceful" fusion research. We thought that buying a plasma focus device ... would provide an excellent cover for buying and learning about fast electronics technology, which could be used to trigger atomic bombs."²

Other problems

Another problem is the "huge" parasitic power consumption of fusion systems ‒ "they consume a good chunk of the very power that they produce ... on a scale unknown to any other source of electrical power." There are two classes of parasitic power drain ‒ a host of essential auxiliary systems that must be maintained continuously even when the fusion plasma is dormant (of the order of 75‒100 MW), and power needed to control the fusion plasma in magnetic confinement fusion systems or to ignite fuel capsules in pulsed inertial confinement fusion systems (at least 6% of the fusion power generated). Thus a 300 MWt / 120 MWe system barely supplies on-site needs and thus fusion reactors would need to be much larger to overcome this problem of parasitic power consumption.

The neutron radiation damage in the solid vessel wall of a fusion reactor is expected to be worse than in fission reactors because of the higher neutron energies, potentially putting the integrity of the reaction vessel in peril.

Fusion fuel assemblies will be transformed into tons of radioactive waste to be removed annually from each reactor. Structural components would need to be replaced periodically thus generating "huge masses of highly radioactive material that must eventually be transported offsite for burial", and non-structural components inside the reaction vessel and in the blanket will also become highly radioactive by neutron activation.

Molten lithium presents a fire and explosion hazard, introducing a drawback common to liquid-metal cooled fission reactors.

Tritium leakage is another problem. Jassby writes: "Corrosion in the heat exchange system, or a breach in the reactor vacuum ducts could result in the release of radioactive tritium into the atmosphere or local water resources. Tritium exchanges with hydrogen to produce tritiated water, which is biologically hazardous. Most fission reactors contain trivial amounts of tritium (less than 1 gram) compared with the kilograms in putative fusion reactors. But the release of even tiny amounts of radioactive tritium from fission reactors into groundwater causes public consternation. Thwarting tritium permeation through certain classes of solids remains an unsolved problem."

Water consumption is another problem. Jassby writes: "In addition, there are the problems of coolant demands and poor water efficiency. A fusion reactor is a thermal power plant that would place immense demands on water resources for the secondary cooling loop that generates steam as well as for removing heat from other reactor subsystems such as cryogenic refrigerators and pumps. ... In fact, a fusion reactor would have the lowest water efficiency of any type of thermal power plant, whether fossil or nuclear. With drought conditions intensifying in sundry regions of the world, many countries could not physically sustain large fusion reactors."

Due to all of the aforementioned problems, and others, "any fusion reactor will face outsized operating costs." Whereas fission reactors typically require around 500 employees, fusion reactors would require closer to 1,000 employees. Jassby states that it "is inconceivable that the total operating costs of a fusion reactor will be less than that of a fission reactor".

Jassby concludes:

"To sum up, fusion reactors face some unique problems: a lack of natural fuel supply (tritium), and large and irreducible electrical energy drains to offset. Because 80 percent of the energy in any reactor fueled by deuterium and tritium appears in the form of neutron streams, it is inescapable that such reactors share many of the drawbacks of fission reactors ‒ including the production of large masses of radioactive waste and serious radiation damage to reactor components. ...

"If reactors can be made to operate using only deuterium fuel, then the tritium replenishment issue vanishes and neutron radiation damage is alleviated. But the other drawbacks remain—and reactors requiring only deuterium fueling will have greatly enhanced nuclear weapons proliferation potential."

"These impediments ‒ together with colossal capital outlay and several additional disadvantages shared with fission reactors ‒ will make fusion reactors more demanding to construct and operate, or reach economic practicality, than any other type of electrical energy generator.

"The harsh realities of fusion belie the claims of its proponents of "unlimited, clean, safe and cheap energy." Terrestrial fusion energy is not the ideal energy source extolled by its boosters, but to the contrary: It's something to be shunned."

References:

1. Daniel Jassby, 19 April 2017, 'Fusion reactors: Not what they're cracked up to be', Bulletin of the Atomic Scientists, http://thebulletin.org/fusion-reactors-not-what-they%E2%80%99re-cracked-...

2. Khidhir Hamza, Sep/Oct 1998, 'Inside Saddam's Secret Nuclear Program', Bulletin of the Atomic Scientists, Vol. 54, No. 5, www.iraqwatch.org/perspectives/bas-hamza-iraqnuke-10-98.htm

A new report by the International Renewable Energy Agency, Renewable Energy Capacity Statistics 2017, states that global renewable electricity generation capacity (including hydro) increased by 161 gigawatts (GW) in 2016, making it the strongest year ever for new capacity additions.¹

Renewable electricity capacity grew by 8.7% in 2016, and renewables accounted for 60% of new capacity from all sources (55% if large hydro is excluded). Solar led the way with a record 71 GW of new capacity, along with 51 GW of wind, 30 GW of hydro, 9 GW of bioenergy (also a record), and just under 1 GW of geothermal energy capacity.

Global renewable electricity capacity has doubled over the past decade and now exceeds 2,000 GW:

YEAR	GLOBAL RENEWABLE ELECTRICITY CAPACITY (GW)	ANNUAL GROWTH (GW)
2007	989
2008	1,058	69
2009	1,133	75
2010	1,223	90
2011	1,326	103
2012	1,444	118
2013	1,563	119
2014	1,690	127
2015	1,845	155
2016	2,006	161

That 2,006 GW capacity is 5.1 times greater than nuclear power capacity of 392 GW (including idle reactors in Japan).² Actual electricity generation from renewables (23.5% of global generation³) is more than double that from nuclear power (10.7%⁴)

The renewable electricity capacity mix is as follows: hydro 58%, wind 22%, solar 13.9%, bioenergy 5.1%, geothermal and marine energy both <1%.

This year's edition of IRENA's Renewable Energy Capacity Statistics series also contains data for off-grid renewables. Off-grid renewable electricity capacity reached a modest 2.8 GW by the end of 2016, with solar contributing almost half of the total.

Investment falls: A separate report by the UN Environment Programme (UNEP) and Bloomberg New Energy Finance (BNEF) states that the strong growth of renewables occurred despite an 23% drop in investment (excluding large hydro).⁵ A separate BNEF report finds that investment in 2016 ‒ including all hydro ‒ fell by 18%.⁶

The fall in investment last year was partly due to falling costs, with the average cost of solar photovoltaics and wind dropping by more than 10% compared to 2015.⁷ Solar provides the most striking illustration: investment in 2016 was down 34% yet solar capacity growth was 34% higher than the previous year.⁸

Despite the drop, investment in renewables in 2016 was still roughly double that of fossil fuel generation.

Employment in the renewable energy sector (excluding large hydro) increased from 5.7 million in 2012 to 8.1 million in 2015 ‒ an increase of 42%.⁹

Future Growth: IRENA Director-General Adnan Amin said in July 2016 that he believes the Agency's REMAP scenario ‒ a doubling of renewable electricity energy by 2030 ‒ is realistic.¹⁰ IRENA's REMAP scenario is consistent with the projections of the International Energy Agency (IEA). The IEA's 2016 Renewable Energy Medium-Term Market Report predicts 825 GW of new renewable capacity from 2016‒21, a 45% increase on the 2015 figure.¹¹ Growth of 161 GW in 2016 is consistent with that five-year projection. The IEA report notes that there is potential for more rapid growth than it projects, and identifies additional policy initiatives which would result in growth 29% higher than the projection of 825 GW.

Coal

A new report by Greenpeace, the Sierra Club and CoalSwarm notes that the amount of new coal power capacity starting construction fell by 62% in 2016 compared to the previous year.¹² In 2016, 65GW of new coal-fired units started construction, compared to 170GW in 2015.

In addition to the 62% drop in new coal plant construction starts, the report's findings also include a 48% decline in overall pre-construction activity, and an 85% decline in new Chinese coal plant permits.

Last year's coal decline was overwhelmingly due to China and India. In China, too much capacity has been built in recent years, and the move away from coal has also been driven by government policy to clean up air pollution. In India, the decline was due to slower-than-expected growth in energy demand, and rapid growth of renewables.

Paul Massara, the former CEO of RWE Npower and now head of a green energy company, North Star Solar, said: "The decline in new coal plants in Asian countries is truly dramatic, and shows how a perfect storm of factors are simply making coal a bad investment."¹³

A record-breaking 64 GW of coal capacity was shut down in the past two years, the report notes, mostly in the US and EU.

References:

1. International Renewable Energy Agency, 2017, 'Renewable Energy Capacity Statistics 2017', www.irena.org/DocumentDownloads/Publications/IRENA_RE_Capacity_Statistic...

Media release: www.irena.org/News/Description.aspx?mnu=cat&PriMenuID=16&CatID=84&News_I...

2. www.world-nuclear.org/information-library/facts-and-figures/world-nuclea...

3. www.irena.org/DocumentDownloads/Publications/IRENA_REthinking_Energy_201...

4. www.worldnuclearreport.org/IMG/pdf/20160713MSC-WNISR2016V2-HR.pdf

5. UNEP/BNEF, 2017, 'Global Trends in Renewable Energy Investment 2017', http://fs-unep-centre.org/sites/default/files/publications/globaltrendsi...

6. BNEF, 'Clean Energy Investment End of Year 2016', https://about.bnef.com/clean-energy-investment/

7. http://web.unep.org/newscentre/more-bang-buck-record-new-renewable-power...

8. Jocelyn Timperley, 6 April 2017, 'Renewables growth breaks records again despite fall in investment', www.carbonbrief.org/renewables-growth-breaks-records-again-despite-fall-...

9. http://resourceirena.irena.org/gateway/dashboard/?topic=7&subTopic=53

10. Karel Beckman, 13 July 2016, 'Interview Adnan Amin, head of IRENA: "Everything we see is pointing to transformational change"', http://energypost.eu/interview-adnan-amin-chief-irena-climate-negotiator...

11. International Energy Agency, 2016, 'Renewable Energy Medium-Term Market Report: Executive Summary', www.iea.org/Textbase/npsum/MTrenew2016sum.pdf

12. Greenpeace, Sierra Club and CoalSwarm, March 2017, 'Boom and Bust 2017: Tracking the Global Coal Plant Pipeline', http://endcoal.org/wp-content/uploads/2017/03/BoomBust2017-English-Final...

13. Adam Vaughan, 22 March 2017, 'Coal in 'freefall' as new power plants dive by two-thirds', www.theguardian.com/environment/2017/mar/22/coal-power-plants-green-ener...

(Click here to view a table documenting many of the accidents, incidents and scandals that Cameco has been involved in from 1981‒2017.)

Where the nuclear power industry goes, the uranium industry follows. A decade ago, the hype about a nuclear power renaissance drove a uranium price bubble: the spot price in May 2007 was six times greater than the current price. The bubble collapsed, the nuclear power renaissance never materialized, and the uranium industry's prospects were further dimmed by the Fukushima disaster.

With the current nuclear power crisis jeopardizing the existence of industry giants like Toshiba and Westinghouse, the question arises: will the crisis create similar carnage in the uranium industry? Might it bring down a uranium industry giant like Cameco, which provides about 17% of the world's production from mines in Canada, the US and Kazakhstan?¹

The short answer is that Cameco will likely survive, but the company has been downsizing continuously for the past five years. Other established uranium companies ‒ such as Paladin Resources² and Energy Resources of Australia ‒ may not survive, and an endless stream of uranium exploration companies have gone bust or diversified into such things as medicinal marijuana production³ or property development.⁴

Cameco's downsizing began soon after the Fukushima disaster:

• In December 2012, Cameco booked a C$168 million (US$124m) write-down on the value of its Kintyre uranium deposit in Western Australia.⁵
• In 2014, Cameco cut its growth plans and uranium exploration expenses, warning that the "stagnant, over supplied short-term market" was not going to improve any time soon.⁶
• In 2014, Cameco put its Millennium uranium project in northern Saskatchewan on hold ‒ where it remains today ‒ and asked the Canadian Nuclear Safety Commission to cease the mine approval process.⁷

Cameco announced in April 2016 that it was suspending uranium production at Rabbit Lake in Canada, reducing production at McArthur River / Key Lake in Canada, and slowing production at its two US uranium mines, both in-situ leach mines ‒ Crow Butte in Nebraska and Smith Ranch-Highland in Wyoming. About 500 jobs were lost at Rabbit Lake, 85 at the US mines, and corporate headquarters was downsized.⁸

Another 120 workers are to be sacked by May 2017 at three Canadian uranium mines ‒ McArthur River, Key Lake and Cigar Lake ‒ and production at McArthur River, already reduced, will be suspended for six weeks in mid-2017.^9,10

"We regret the impact of these decisions on affected employees and other stakeholders," Cameco president and CEO Tim Gitzel said. "These are necessary actions to take in a uranium market that has remained weak and oversupplied for more than five years. While it is positive that we are starting to see other producers announce their intent to reduce supply, we have not yet seen an actual reduction in supply. Ultimately, it will be the return of both term demand and term contracting in a significant way that will signal that market fundamentals have turned more positive."¹¹

Cameco's revenue dropped C$323 million (US$238m) in 2016 and the company posted a C$62 million (US$46m) loss for the year. The loss was largely the result of C$362 million (US$267m) in impairment charges, including C$124 million (US$91m) related to the Rabbit Lake mine and a write-off of the full C$238 million (US$176m) value of the Kintyre uranium project in Western Australia.¹²

"I think it's fair to say that no one, including me, by the way, expected the market would go this low and for this long," Gitzel said.¹³ He said "market conditions in 2016 were as tough as I have seen them in 30 years."¹⁴

Cameco's 'tier-1' mines ‒ McArthur River and Cigar Lake in Canada and the Inkai ISL mine in Kazakhstan ‒ have been largely unaffected by the cutbacks except for the slowdown at McArthur River. But the tier-1 mines aren't safe, Cameco plans to reduce production by 7% in 2017, and new mines are off the table. Gitzel said: "In fact we're far from declaring that even tier-1 production is free from the pressure of further reductions. And obviously we're very far from requiring any new greenfield uranium projects."¹⁴

Cameco is considering selling its two US uranium mines ‒ Crow Butte in Nebraska and Smith Ranch-Highland in Wyoming. Company spokesperson Gord Struthers said the company was at an "early stage" in the process and there was no target date for a decision. "Together, our US facilities have capacity to produce up to 7.5 million pounds a year and hold 93 million pounds of reserves and resources. In a different uranium market, it would be very attractive," he said.¹⁵

Analyst David Talbot said Cameco has probably been open to selling the US mines for some time.¹⁶ The mines are potentially attractive, two US producers told Reuters, but liabilities related to reclaiming groundwater and future decommissioning of the mines may limit interest. Those costs might amount to C$257 million (US$190m), Cameco said.¹⁶

TEPCO cancels billion-dollar contract

Cameco faces a new problem with notorious Japanese company TEPCO announcing on January 24 that it had issued a contract termination notice, sparking a 15% drop in Cameco's share price over the next two days.^17,18,19 The termination affects about 9.3 million pounds of uranium oxide due to be delivered until 2028, worth approximately C$1.3bn (US$959m).

TEPCO argues that a "force majeure" event occurred because it has been unable to operate its nuclear plants in Japan ‒ four reactors at Fukushima Daini and seven reactors at Kashiwazaki Kariwa ‒ for some years due to government regulations relating to reactor restarts in the aftermath of the March 2011 Fukushima disaster.

Cameco plans to fight the contract termination and will pursue "all its legal rights and remedies". Tim Gitzel said: "They've taken delivery under this contract in 2014, 2015 and 2016, so we're a bit perplexed as to why now all of a sudden they think there's a case of, as they say, 'force majeure.'"¹⁷ TEPCO has received and paid for 2.2 million pounds of uranium oxide from Cameco since 2014.

Gitzel also noted that other Japanese utilities have successfully restarted their plants ‒ three reactors are operating and seven have been approved to restart. "It is our opinion that TEPCO doesn't like the terms it committed to, particularly the price, and they want to escape the agreement," Gitzel said.¹⁹

Financial analysts told Reuters that Cameco has a winning record in previous contract disputes with customers.¹⁸ A negotiated settlement may be the outcome. Cameco reported cash receipts of C$46.7 million and C$12.3 million last year to allow two customers to cancel long-term uranium contracts.¹⁸

Japan is "swimming – some would say drowning – in uranium", the senior editor of Platts Nuclear Publications said in early 2016.²⁰ According to Forbes writer James Conca, Japan's existing uranium inventory will suffice to fuel the country's power reactors "for the next decade".²⁰

Nick Carter from Ux Consulting said he believes TEPCO is the first Japanese utility to terminate a long-term contract, while many others have tried to renegotiate contracts to reduce volumes or prices or delay shipments. Gitzel acknowledged that "there is concern over the risk of contagion from the TEPCO announcement" ‒ more customers might try to cancel contracts if TEPCO succeeds.¹⁴

Tax dispute

A long-running tax dispute is starting to heat up with the October 2016 commencement of a court case brought against Cameco by the Canada Revenue Agency (CRA). The dispute has been slowly winding its way through appeals and legal motions since 2009 when Cameco first challenged the CRA's findings. The court case is likely to conclude in the coming months but the court's decision may not be finalized until late-2017 or 2018.

Cameco is accused of setting up a subsidiary in Switzerland and selling it uranium at a low price to avoid tax.²¹ Thus Cameco was paying the Swiss tax rate of about 10% compared to almost 30% in Canada.²² Cameco set up the subsidiary in 1999 and established a 17-year deal selling uranium at approximately US$10 a pound, far less than the average price over the 17-years period.²³ Another subsidiary was established in Barbados ‒ possibly to repatriate offshore profits.²²

If Cameco loses the case in the Tax Court of Canada, it could be liable for back-taxes of C$2.2 billion (US$1.62bn).²³ Last year, the company spent approximately C$120 million (US$89m) on legal costs related to the tax dispute.¹¹

Canadians for Tax Fairness²⁴ have been arguing the case for legislative change to stop profit-shifting schemes, and for Cameco to pay up. Last year, the NGO teamed up with Saskatchewan Citizens for Tax Fairness and the international corporate watchdog, SumOfUs, to deliver a petition with 35,000 signatures to the Prime Minister's office and to Cameco's executive offices.²⁵

Don Kossick from Canadians for Tax Fairness said: "Cameco has a corporate responsibility to pay the $2.2 billion. They use Canadian-developed technology to dig Canadian uranium out of the Canadian ground and rely on the Canadian transportation system to bring their product to market. Cameco employs Canadian workers who developed their knowledge and skills in Canadian schools, rely on Canadian hospitals if / when they get sick and rely on the stability and legal protection that Canadian democracy provides. Canadians are exasperated with this shell game."²⁶

Kossick noted that the C$2.2 billion could easily cover the budgetary deficit in Saskatchewan that has resulted in major cuts to health, education and human services.

References:

1. www.cameco.com/about

2. Paul Garvey, 16 Feb 2017, 'Paladin risks falling prey to Chinese nuclear firm CNNC', www.theaustralian.com.au/business/mining-energy/paladin-risks-falling-pr...

3. ABC, 17 April 2015, 'Capital Mining makes bid to be first to grow medicinal cannabis', www.abc.net.au/news/2015-04-17/capital-mining-in-bid-to-be-first-to-grow...

See also: www.wise-uranium.org/upaussa.html

4. Vicky Validakis, 6 June 2014, 'Price collapse sees junior miner ditch uranium to focus on property development', www.miningaustralia.com.au/news/price-collapse-sees-junior-miner-ditch-u...

5. Nick Sas, 13 Feb 2013, 'Cameco puts Kintyre on ice', https://thewest.com.au/news/wa/cameco-puts-kintyre-on-ice-ng-ya-344802

6. Cameco, 7 Feb 2014, 'Cameco Reports Fourth Quarter and 2013 Financial Results', www.cameco.com/media/news/cameco-reports-fourth-quarter-and-2013-financi...

7. www.cameco.com/businesses/uranium-projects/millennium

8. World Nuclear News, 22 April 2016, 'Cameco scales back uranium production', www.world-nuclear-news.org/UF-Cameco-scales-back-uranium-production-2204...

9. Cameco, 17 Jan 2017, 'Cameco Announces Preliminary 2016 Earnings Expectations and Operational Changes Planned for 2017', www.cameco.com/media/news/cameco-announces-preliminary-2016-earnings-exp...

10. Greg Peel, 14 March 2017, 'Uranium Week: See You In Court', www.fnarena.com/index.php/2017/03/14/uranium-week-see-you-in-court/

11. World Nuclear News, 18 Jan 2017, ''Cameco responds to 'discrepancy' in analyst expectations', www.world-nuclear-news.org/C-Cameco-responds-to-discrepancy-in-analyst-e...

12. The Canadian Press, 9 Feb 2017, 'Cameco swings to $62M loss on write-downs as uranium market drags', http://globalnews.ca/news/3240104/cameco-swings-to-62-million-loss-on-wr...

13. Alex MacPherson, 10 Feb 2017, ''No one…expected the market would go this low and for this long': Cameco records $62-million net loss for 2016', http://thestarphoenix.com/business/mining/cameco-records-62-million-net-...

14. Cameco, 9 Feb 2017, 'Cameco's (CCJ) CEO Tim Gitzel on Q4 2016 Results ‒ Earnings Call Transcript', https://seekingalpha.com/article/4044994-camecos-ccj-ceo-tim-gitzel-q4-2...

15. World Nuclear News, 9 March 2017, 'Cameco considers future of US operations', http://world-nuclear-news.org/C-Cameco-considers-future-of-US-operations...

16. Rod Nickel, 6 March 2017, 'Exclusive: Cameco explores U.S. mines sale as uranium slump drags on – CEO', www.reuters.com/article/us-cameco-uranium-idUSKBN16D28I

17. 6 Feb 2017, 'Cameco and Tepco in dispute over uranium contract', www.neimagazine.com/news/newscameco-and-tepco-in-dispute-over-uranium-co...

18. Dan Healing / Reuters, 1 Feb 2017, 'Cameco 'surprised' after Tepco cancels $1.3-billion uranium-supply contract', www.theglobeandmail.com/report-on-business/industry-news/energy-and-reso...

19. David Shield / CBC News, 1 Feb 2017, 'Cameco threatening legal action after Japanese company cancels major uranium contract', www.cbc.ca/news/canada/saskatoon/cameco-threatening-legal-action-after-j...

20. James Conca, 4 Jan 2016, 'As The World Warms To Nuclear Power, The Outlook For Uranium Is Up', www.forbes.com/sites/jamesconca/2016/01/04/the-2016-uranium-market-refle...

21. WISE Uranium, www.wise-uranium.org/umopcdn.html

22. Bruce Livesey, 25 April 2016, 'Did this company engineer the largest tax dodge in Canadian history?', www.nationalobserver.com/2016/04/25/news/did-company-engineer-largest-ta...

23. Ian Bickis, 3 Oct 2016, 'Cameco and the CRA head to court over potential $2.2-billion tax dispute', The Canadian Press, http://business.financialpost.com/news/cameco-and-the-cra-head-to-court-...

24. www.taxfairness.ca/en/search/node/cameco

25. Emma Paling, 23 June 2016, 'Cameco Tax Dispute: All The Things Canada Could Buy With $2.1 Billion', www.huffingtonpost.ca/2016/06/23/cameco-tax-evasion_n_10550884.html

26. 'Tax Court Battle: The People vs Cameco', www.taxfairness.ca/en/news/tax-court-battle-people-vs-cameco

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Cameco's uranium deposits in Western Australia

Kintyre (70% Cameco / 30% Mitsubishi)

The Martu Aboriginal people have fought against this proposed uranium mine since the 1980s. The deposit sits between two branches of a creek called Yantikutji which is connected to a complex network of surface and groundwater systems. It is also in an area that was cut out of the Karlamilyi National Park, WA's biggest National Park. Kintyre is home to 28 rare, endangered and threatened species. The project would include an open pit 1.5 km long, 1.5 km wide, it would use 3.5 million litres of water a day and leave behind 7.2 million tonnes of radioactive mine waste over the life of the project.

In June 2016, Martu Traditional Owners led a 140 km, week-long walk to protest against Cameco's proposed uranium mine at Kintyre. Aboriginal Traditional Owners are concerned the project will affect their water supplies as well as 28 threatened species in the Karlamilyi National Park.

Joining the protest walk was Anohni, the Academy Award-nominated musician from Antony and the Johnsons. She said: "It's a huge landscape – it's a really majestic place. It's really hard to put a finger on it but there's a sense of presence and integrity and patience, dignity and perseverance and intense intuitive wisdom that this particular community of people have. There is almost an unbroken connection to the land – they haven't been radically disrupted. They are very impressive people – it's humbling to be around these women. In many regards, I think the guys who run Cameco are desolate souls, desolate souls with no home, with no connection to land, with no connection to country."

www.ccwa.org.au/kintyre

Yeelirrie (100% Cameco)

Yeelirrie in the local Wongutha Aboriginal language means 'place of death'. The local community has fought against mining at Yeelirrie for over 40 years. There was a trial mine in the 1970s which was poorly managed: the site was abandoned, unfenced and unsigned with a shallow open pit and tailings left behind. The project would include a 9 km long, 1 km wide open pit, it would use 8.7 million litres of water a day and leave behind 36 million tonnes of radioactive mine waste over the life of the mine. There are many cultural heritage sites under threat from this proposal. The project was rejected by the Western Australian Environmental Protection Agency in 2016 because of the threat that 11 species of underground microfauna would become extinct. The WA Environment Minister ignored the EPA advice and approved the project anyway.

www.ccwa.org.au/yeelirrie