Mini yet mighty, these nuclear power reactors have 3 Premiers becoming ‘besties’ with the Canadian uranium industry
Three Canadian premiers agreed they want more nuclear power in a meeting of like minds prior to the Council of Federation in December. Ontario, Saskatchewan and New Brunswick premiers signed a memorandum of understanding to work together to get small modular reactors (SMRs).
Mini yet mighty, these nuclear power reactors could replace coal and diesel power. In remote locations, they would give Canadians access to clean, green, stable energy and reduce their power pollution footprint.
And note to investors, if the government wants more nuclear power, they will want more uranium. In 2018, more uranium was mined in Canada than any other country – 531,608 tU, about one-fifth of the world total.
The case for SMRs
Despite still being on the drafting table in Canada, SMRs are striking a power chord in the green energy hungry world.
These efficient power plants may produce less than 300 electrical megawatts (MWe), but can be easily constructed, moved and installed. Even off-grid. Multiple units can be linked to supply more power. For Canada’s vast, remote northern lands, the solution makes perfect sense.
Get our daily investorintel update
Look for SMRs to be of greatest benefit to two areas of the Canadian landscape: remote indigenous communities and large, heavy industry sites like mining. For remote indigenous communities SMRs would replace diesel generators—reducing air and noise pollution in the community and for the fuel delivery. It would stop the pileup of empty drums and their potential environmental damage. An SMR could also enable new local industries and water treatment facilities.
Mining itself is a great candidate for SMRs. With most mines being in remote parts of Canada they are an ideal locations to use SMRs. The technology could reduce on-site air pollution for the ones that use diesel power plants and heavy equipment. The all-electric mine is a key focus in the industry to improve on-site air quality and reduce pollution.
In terms of health and safety, the World Nuclear Association states that SMRs are safer than large nuclear power plants due to a design that reduces the chance of a meltdown. Importantly there is no direct air pollution, a leading cause of early death in many industrialized areas.
The premiers of Ontario, Saskatchewan, and New Brunswick are looking for ways to reduce the pollution associated with burning coal for power. Saskatchewan gets half of its electricity from coal-fired power plants. New Brunswick still operates one coal-fired plant. Ontario closed its coal plants and now needs more nuclear and natural gas electricity supply.
SMRs could become a new export technology. Canada is well-known for its CANDU nuclear technology, but there is no Canadian design yet for an SMR. There are about 50 SMR designs being developed worldwide at this time, and many countries want well-designed SMRs to work for them.
Canada launched a process in 2018 to prepare a roadmap to explore the potential of on- and off-grid applications for small modular reactor technology. The roadmap aims to help position Canada to become a global leader in the emerging SMR market, according to Natural Resources Canada.
Uranium’s appeal comes from its energy content as nuclear fuel. Just 1 kg of uranium 235 [U235] can produce 20 terajoules of energy, or the same energy content of 1,500 tons of coal. Nuclear fuel is usually around 3% U235. This is a fantastic differentiation in volume of fuel of approximately 30 to 1.
The group of premiers expects the process to design and build Canadian SMRs may take eight to ten years. So will the uranium supply be ready? Right now, Canada’s working uranium mines are in Saskatchewan operated and jointly owned by Cameco Corporation (TSX: CCO | NYSE: CCJ), Orano Canada (formerly Areva Resources Canada) and Denison Mines Corp. (TSX: DML | NYSE American: DNN). There are several other deposits and proposed mines in the Athabasca basin of Saskatchewan.
As well, Ontario holds some excellent properties for uranium resource development in the past producing camp at Elliot Lake. If the government works with the mining industry now, and a new mine gets permitted and built, the uranium could be out of the ground in time to supply those SMRs. We hope the premiers continue their forward-thinking to move swiftly to aid the development of new mine supply.
In August of 2019 Russia deployed a floating SMR from their northern port of Murmansk to their remote far east, opposite Alaska. The SMR replaces a coal-fired power plant for Pevek, a city of 50,000. The developer Rosatom sees the unit as an opportunity for clean, green stable energy supplies in harsh and remote conditions.
The premiers of the three provinces want the same opportunities for their own remote locations. And investors can look to Canadian uranium miners as a key partner in this new power play.
Ronald Wortel, MBA, P.Eng. is a mining investment professional with extensive experience in analysis of companies, projects and markets. He worked as both a sell-side ... <Read more about Ron Wortel>