Uranium Policy

Canada's booming uranium industry has leveled off sharply in the past month, in the wake of rumors out of Ottawa and Washington (which buys most of Canada's uranium) that the market might be approaching the saturation point and that the Canadian government was about to stop buying uranium. Last week Defense Production Minister C. D. Howe cleared the air with a statement of the government's uranium policy: P: Until March 31, 1962, Ottawa will buy all acceptable uranium concentrates, i.e., 10% U208, at a maximum price of $7.25 per Ib. for the uranium content and will pay premium prices for uranium produced under government contract. P: No new premium-price contracts will be put into effect after April i, 1957. P: No uranium mine which has not proved its ore body by March 31, 1956, and its readiness to go into production within a year, will get a premium-price contract.

Uranium stocks dipped with Howe's announcement but bounced back fast. There was no panic selling of uranium shares, and the only companies that seemed depressed were a few small, speculative outfits which may have trouble getting into production in the 20 months Howe allowed them. Heads of the bigger companies took Howe's statement as a fair warning that Canada and the U.S. will not go on indefinitely paying a premium price for stockpile uranium. Said Franc Joubin, president of Algom Uranium and discoverer of Ontario's Blind River field: "This is the orange light before the red, which is always welcome."

Why did Howe flash the warning? Howe himself did not say, and tight-lipped U.S. Atomic Energy Commission officials in Washington would add nothing. But William Bennett, head of Atomic Energy of Canada, Ltd., hinted that Ottawa had received word from Washington putting a definite ceiling on the amount of Canadian uranium the U.S. will contract to buy.

Bennett professed not to know whether Washington's cutback plans were caused by an ample supply of uranium in the U.S. or by the prospect of some workable new process that could make uranium obsolete as a nuclear fuel. If the latter was the case, Canada was obviously unaware of it. Almost simultaneously with Howe's policy statement, the government revealed the details of Canada's first atomic power station, an $11 million plant that was described as a model for many more in the future. The plant will be fueled exclusively with Canadian uranium.

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