The downturn in traditional energy industries has hit close to home this week.
Cameco announced today last Thursday that it will reduce its U.S. staff by 85 positions, some of which are based in Crawford at the Crow Butte facility. The layoffs, which include severance packages, were announced at the end of the work day and will be completed on a rolling basis before the end of May, said Ken Vaughan, a spokesman for Cameco.
Exactly how many positions will be eliminated at Crawford is not yet available. The facility currently employs 42. Cameco has 255 employees at its U.S. sites and plans to retain a staff of approximately 170 after the reductions. The reductions will be in both employees and long-term contractors.
The cuts come in the face of a five-year downturn in the uranium market, Vaughan said. Long-term the company remains optimistic that the market will rebound but must make adjustments in the meantime
“We will be continuing our environmental restoration and reclamation programs, and we will be continuing our ongoing licensing and permitting efforts,” Vaughan said. That will allow the company to resume operations if and when the market picks up.
The Atomic Safety and Licensing Board is currently reviewing Crow Butte’s operational license for final renewal, and the mine has three expansion permits pending before the Nuclear Regulatory Commission.
A press release from Cameco said U.S. production this year is expected to be 1.1 million pounds, down from 1.4 million in light of the operational changes. The company is also slashing 500 positions at its Rabbit Lake facility in Canada and will evaluate its corporate office in an effort to reduce general and administrative expenses.
Valuations at Crow Butte have fallen sharply in recent years. The Dawes County Assessor’s Office reported in March that the valuation for the mine fell $6.1 million this year for a total valuation of $13,539,400. The mines valuation is based on its supply of ore reserves; as those reserves are depleted, the value has fallen. In 2011, Crow Butte was valued at $75.9 million.
Vaughn said the company hopes to see forward movement on an expansion permit for its Marsland field by the end of this year. The permit request was filed in 2012. The other two expansion permits – North Trend and Three Crows – were filed in 2007 and 2010, respectively, but Marsland is the larger reserve and is the primary focus of Cameco.
However, even if the permit is secured, Crow Butte will not open any new well fields until the market rebounds. Uranium is trending in the mid-$20 range, well below the $75 per pound price it was bringing prior to a nuclear accident at the Fukushima Daiichi plan in Japan following an earthquake five years ago.