Cameco to leave Bruce Power - story updated

31 January 2014

A major shareholder in Bruce Power's Bruce B nuclear power plant, uranium mining firm Cameco, has announced it has agreed to sell its 31.6% stake to consortium member Borealis, the investment arm of OMERS, a Canadian pension fund.

The CAN $450 million ($404 million) sale would increase Borealis's stake in Bruce Power from 24.5% to as much as 56.1%. The final figure depends on the decision of other consortium partners, TransCanada Pipelines, a power infrastructure company, the Power Workers' Union and the Society of Energy Professionals, on whether or not to exercise options to purchase part of Cameco's stake for themselves.

"We believe the best option for our shareholders is to sell our interest in Bruce Power and continue to reinvest in our core uranium business where we see strong potential for growth," said Tim Gitzel, Cameco's president and CEO.

Bruce Power was upbeat about the transaction. ""Cameco played a critical role in the formation of Bruce Power in 2001 and have been a strong partner, contributing greatly to the success of the site," said Duncan Hawthorne Bruce Power's President and CEO.
“However, the outlook of both Bruce Power and Cameco has evolved and this is a unique opportunity for Bruce Power to turn our policy position in the Long-Term Energy Plan into action, while Cameco can focus on its role as a world leader in the nuclear fuel market through this restructuring," added Hawthorne. The LTEP is an Ontario-wide plan for power.

Bruce Power is Canada's largest public-private partnership: the Bruce site assets remain owned by the province, operated by Bruce Power and the company's partners meet investment requirements, which has totalled $7 billion since 2001. The price of power is controlled and sold through contract with the Ontario Power Authority (OPA).

Bruce Power provides about 30% of Ontario's electricity at its eight-unit site with a generation capacity of 6300 MW. Units 1 and 2 were restarted in 2012 after years offline.

A proposed nuclear new-build project at Darlington, also in Ontario, was cancelled in 2013 due to expectation of low future electricity demand growth. A recent report by Canada's Public Policy Forum, "Canada's Nuclear Energy Sector: Where to from here?" concludes that the future of Canada's nuclear energy sector is unclear.

Before the transaction, Cameco owned a 31.6% stake of Bruce B, the same as Borealis and TransCanada. The Society of Energy Professionals and the Power Workers' Union shared a 5.2% stake, a Bruce Power spokesman said. For Bruce A, TransCanada and Borealis each had a 49% stake, with the others sharing a 2% stake. Post-transaction, Borealis would have a 56.1% stake, TransCanada a 46.8% stake, and SoEP and PWU would share a 7.1% stake of both Bruce A and B combined.



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