Cameco shares slump after Japan’s Tepco cancels uranium supply contract

Shares in uranium producer Cameco are down 12 per cent after Japan’s Tepco, operator of the Fukushima plant, cancelled a long-term supply agreement.

Tokyo Electric Power’s cancellation will affect about 9.3m pounds of uranium through 2028, worth about C$1.3bn in revenue, said Cameco, one of the largest producers of the nuclear fuel.

Tepco terminated the supply contract on Jan. 24 because it was unable to operate its nuclear plants due to government regulations following the Fukushima nuclear disaster in March 2011, Cameco said.

Cameco added it sees no basis for terminating the contract and will pursue “all its legal rights and remedies.”

A 2011 earthquake and tsunami killed more than 15,000 people and led to the meltdown of three of the six reactors at the Fukushima Daiichi nuclear power plant. Following the disaster Japan closed all of its 50 nuclear reactors.