PORT HOPE – Cameco announced Friday morning it is suspending uranium hexafluoride (UF6) production at its Port Hope plant.

The work stoppage is fueled by contract dispute between Cameco and its sole supplier of hydrofluoric acid (HF). Upon resuming production in September after a 14 month shutdown, Cameco was informed by it’s supplier that their contract was no longer considered applicable because there were no recent orders. The dispute has resulted in unreliable and expensive deliveries of the material.

“We’ve had a sole source supplier for about 30 years and the relationship has worked quite well until now,” said Cameco spokesman Doug Prendergast.

“Our plan going forward is to have a more diversified supply chain.”

Cameco is currently in talks with several HF suppliers while also seeking to resolve the dispute with the current supplier. Given the uncertainty, Cameco has decided to suspend UF6 production until the second half of 2009.

During the several weeks it will take to suspend UF6 production safely, the company will be review staffing levels and layoffs will result. The exact number and type of positions affected has not been determined; however, the company expects the number will be less than 100 of the 440 people employed at the conversion facility.

“We’re currently looking at staffing levels to see what makes the most sense,” Mr. Prendergast said.

“Decisions as to the number and type of jobs lost will be made by mid-December.”

The conversion facility’s other plant that produces uranium dioxide (UO2) is not impacted.

During the layoff, Cameco will carry out number of projects at the UF6 plant, including fluorine cells refurbishment and general work to assure a safe and efficient operation when the plant restarts. Part of the refurbishment will include readying a new receiving area for HF from overseas suppliers. Previously HF was always delivered by railcar, but product from the new suppliers will most likely arrive by sea container, so new receiving practices will be implemented during the shut down.

“Most of the temporary suspension work is to ensure that when we do restart we can do so safely and ramp up production as efficiently as possible,” Mr. Prendergast said.

“We also want to be prepared to begin receiving new product so production can be more efficient upon restart.”

UF6 production is expected to resume by the second half of 2009.

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