Cameco Suspends UF6 Production, Fallout Minimal - TD Analyst

Uranium giant Cameco Corp. (CCJ) announced on Friday that it is suspending uranium hexafluoride [UF6] production at its plant in Port Hope, Ont. It is the end result of a contract dispute with the company's sole supplier of hydrofluoric acid. Cameco feels the supplier charges too much money, and is now looking for new sources.

TD Newcrest analyst Greg Barnes said this is no surprise, noting that Cameco warned this could happen several times. He also said that the impact is minimal, as the conversion business makes up just 2% of the company's operating profit for 2009, based on his models.

Cameco's production of uranium dioxide [UO2] in Port Hope will not be affected by the suspension.