Canadian uranium mining giant Cameco Corporation of Saskatoon, and Toronto-based powerhouse Brookfield Asset Management have signed a historic agreement with the U.S. Department of Energy to invest up to $80 billion in the deployment of advanced small modular reactors in America.
On October 28, the news that Cameco shares surged more than 22% on the TSX made the entire week of nuclear-charged euphoria complete as the world shifts to energy sources. The renewable division of Brookfield, coupled with the fuel supply knowledge of Cameco, will be in the vanguard, with 20 gigawatts of clean power by 2035, or 16 million homes in the American heartland, making it a threat to coal-based grids.
This bold project comes at a time when the price of uranium has shot up – now at $85 a pound – by 30% since the beginning of the year because of supply crunches in both Kazakhstan floods and Russian export bans. Cameco, the largest publicly traded uranium producer in the world, will offer long-term contracts on fuel, trying to anchor the deal with the reserves of its McArthur River mine, which is 400 million pounds.
Brookfield, recent purchaser of Westinghouse Electric and now with reactor technology and financial strength, implements the NuScale Power VOYGR designs that are legally certified by the Nuclear Regulatory Commission. The U.S. government contributes 2.5 billion dollars in loan guarantees, which indicates that Washington is now shifting to nuclear as a climatic fortification as part of the Iranian 30-billion clean energy purse.
In the case of Canada, the agreement highlights the rediscovery of uranium as a geopolitical key. The Athabasca Basin, with 20% of the world’s reserves, is already serving 10% of the reactors in the U.S. and plans to go up exponentially with the population of Saskatchewan.
Cameco Chief Executive, Tim Gitzel, described it as a transformational gateway, and estimated annual revenues growing to 3 billion by 2028, based on current 2.5 = 2028 annual revenues, on locked-in pricing will grow to 40% margins in EBITDA.
The Connor Teskey of Brookfield followed suit, saying the deal would fit well with net-zero requirements: “Nuclear is the baseload hero renewables need. Light-factory-built modular reactors have compared construction schedules, reducing ten years to three years, Teskey added.
Challenges persist, however. Federal regulation is a hurdle, with environmental groups crying about waste storage loopholes. The process of Indigenous consultation in states where the reactors are to be located may slug time schedules. The volatility of Uranium, now correlated to election cycles and OPEC manipulations, is a risk factor; a Trump victory could shift towards fossil fuels, rather than his pro-energy policy may unavoidably certify nuclear subsidies.
The headlong River refinery growth that Cameco had planned and was held back by labour issues should be brought online to satisfy fuel requirements, and Brookfield has financing challenges in the 5% Treasury yields.
The uranium market was not the only market that felt the ripple: TSX-traded uranium peers NexGen Energy and Denison Mines shot up 15%, with other world suppliers Orano and Kazatomprom looking at partnerships. The transaction strengthens the Canadian competitive advantage in critical minerals, as the government of Canada is spending $4 billion on its Critical Minerals Strategy that directs subsidies to the explorers in the North.
With the electric cars and AI data centres thirsty, and estimated to increase the demand of the U.S by two times in 2030, the dispatchable zero-carbon profile of nuclear outcompetes intermittent solar and wind.
The Q3 earnings, which Cameco is expected to report on November 8, have increased stakes because analysts at BMO Capital now have price targets of $75, upbeat by 60. Cigar Lake production was at a record 18 million pounds, though the Olympic Dam joint venture in Australia made gains. Brookfield, which runs $900 billion of assets, believes that the deal is a jewel of its 100-billion infrastructure portfolio, which can no longer focus on hydro and solar but on high-yield atomic ventures with 8 % IRRs.
This transnational game is a typical example of Canadian wit when it comes to green geopolitics: it is not only resources that are exported, but also the solutions to the energy crisis that America finds itself in. As 70% of the rare earths are cornered by China, the Ottawa uranium diplomacy with G7 pacts, enhancing it, ensures supply chains.
Just because a reactor is sprouting up in Montana prairies, then growing to the Appalachian hills, Cameco and Brookfield are not only constructing power plants, but they are forming the North American energy partnership that will be in full swing in the decarbonization decade. Canada’s atomic ace is in a world where the clock is ticking to 1.5 degrees to win.