Explained : Cameco CEO sees major growth in India after inking uranium supply deal and Its Impact

The Indian nuclear market presents a major growth opportunity for Cameco Corp. CCO-T, said chief executive officer Tim Gitzel, after securing a $2.6-billion uranium supply deal with the country which is embarking on a generational expansion of nuclear power and opening the sector to private investment.

On Monday, Mr. Gitzel signed an agreement with the Indian government to supply 22 million pounds (9.9 million kilograms) of uranium to the country between 2027 and 2035. The deal was the centrepiece of Prime Minister Mark Carney’s visit to India this week, and was signed in the palatial Hyderabad House in New Delhi with Mr. Carney and Indian Prime Minister Narendra Modi looking on.

Cameco had a nuclear supply deal with India from 2015 to 2020. But it was not renewed as political relations between the countries soured, then hit rock-bottom in 2023 following the killing of Canadian Sikh activist Hardeep Singh Nijjar. The government of former prime minister Justin Trudeau accused agents of India of being involved at the time.

“We’ll do the business-to-business. But in nuclear, you still need the governments to get along,” Mr. Gitzel said in an interview with The Globe and Mail in Delhi after the announcement.

Cameco’s stock price was up around 5 per cent in midafternoon trading on Monday following the announcement.

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The rapprochement between Ottawa and New Delhi over the past year opened the door to the deal getting done, Mr. Gitzel said. And for Saskatchewan-based Cameco, one of the world’s largest uranium miners, the timing is fortuitous.

India is embarking on a massive expansion of its nuclear power sector, with the government aiming to increase generation capacity more than 10-fold by 2047 – to 100 gigawatts from 8.8 gigawatts. That will require dozens of new, larger reactors, on top of the 26 already in operation in India.

This will be a growing source of global uranium demand, Mr. Gitzel said, and India is seeking out suppliers. The country inked a uranium supply deal with Kazakhstan two weeks ago.

Cameco’s 22-million-pound agreement would represent a little under 10 per cent of the company’s contracted supply. Other major markets for Cameco include the United States, France, Canada and China.

India’s desire to rapidly scale its nuclear sector also presents opportunities for companies that build nuclear reactors, such as Westinghouse Electric Co., which is 49-per-cent owned by Cameco and 51-per-cent owned by Toronto-based Brookfield Renewable Partners.

To date, the nuclear energy sector in India has been state-owned, with governments building and running the power plants. That’s expected to change after New Delhi altered its laws around liability for nuclear accidents late last year in a bid to get private companies to invest in the sector.

“It’s absolutely critical to private companies, like a Westinghouse, coming in to build new reactors that you get clarity on the liability. Before it was not clear as to who would be responsible in the case of an accident,” Mr. Gitzel said.

The nuclear liability reform is part of a much broader push by Mr. Modi to open previously closed sectors of the Indian economy to foreign investors. These liberalization efforts have spurred Canadian pension funds and other large institutional investors, such as Brookfield and Fairfax Holdings, to pour tens of billions of dollars into Indian infrastructure, from toll roads to airports. Nuclear reactors could be next.

Westinghouse already has located a site for a potential reactor in Kovvada, Andhra Pradesh, in the southeast of the country. Mr. Gitzel said they’re looking at putting six AP1000 units on the site, each with the power to produce around 1,200 MW of power. (A gigawatt is 1,000 megawatts.)

Saskatchewan Premier Scott Moe accompanied Mr. Carney on the India trip this week, and witnessed the signing of the uranium agreement.

“Security of supply is very crucial and rare in an uncertain world that we seem to be living in,” Mr. Moe said in an interview. “But it’s also good for Saskatchewan, because we have that security of sale years into the future. It provides job security, provides economic security and all of those things.”

He called the deal a “renewal” after several years of being sidelined by political tensions and pointed to the scale of the opportunity.

“We’re talking about a market that is committing to 100 gigawatts of nuclear power by 2047, that’s roughly 90 large scale reactors… The significance and the size of the market here is sometimes beyond what we can even comprehend. But Tim never lost sight of that, and his team at Cameco never lost sight of that,” Mr. Moe said.

Alongside the uranium deal, Mr. Carney and Mr. Modi announced a number of memorandums of understanding to increase co-operation in areas such as critical minerals, LNG and hydrogen. And they formally committed to negotiating a new Comprehensive Economic Partnership Agreement, which would lower tariffs and increase market access for both countries, by the end of the year.