Cameco Corp (USA) (NYSE:CCJ) has been struggling since last few years with the slump. The deteriorating finance condition of the company has led the investors to wonder whether the largest uranium company in Canada should start contrarian position. Also, Tokyo Electric Power Company Holding Inc has said that the Canadian company is seeking damage claim of $682 million.
It was the Tsunami that affected the trading in Japan. Before the 2011’s Fukushima nuclear disaster, the uranium in Japan traded at an average price of $70 per pound. After the accident, the entire fleet of nuclear facilities was shut down by Japan due to which the uranium prices tumbled hugely. Although there have been brief spikes since then, uranium prices have failed to make a major recovery.
Cameco faced a net loss of $124 million and according to management, there has been no improvement in the market trends as the company continues to struggle for sustenance. To cover up the losses, Cameco cut down its dividend to $0.08 per share from $0.40 on an annualized basis. The company management also shut down Key Lake mill and McArthur River mine projects.
The company officials have said that due to global oversupply of uranium, there are no chances of improvement in the prices in the coming days. Also, the uranium supplier is facing tough time battling with the Canada Revenue Agency.
Cameco is fighting over the issues regarding taxes on earnings that are generated via foreign subsidiary. The decision is expected to come sometime next year with the earlier hearing wrapping up in September 2017.
Tepco Says Cameco Is Seeking Damages In Millions
According to the Japanese electric power company, the uranium producer from Canada is asking for $681.9 million in damages as a part of the arbitration procedure. Tepco officials said that the Canadian company is seeking the damages after the Japanese power conglomerate suspended the uranium supply contract with the uranium supplier in January.
Tepco has said that Cameco filed for the arbitration in May and has mentioned the damages amount in the document.