Cameco Corp. is in a position to grow, the president of the Saskatoon-based Uranium giant recently told investors, because a “geopolitical crisis has hit our market” with Russia’s war on Ukraine.
Tim Gitzel was speaking earlier this month after the company announced it had partnered with Brookfield Renewable Partners to acquire Westinghouse Electric, a nuclear power plant equipment maker.
Cameco, one of the world’s largest uranium companies, said the deal would provide an opportunity to get new business in countries traditionally served by Russia.
“With Russia’s actions in Ukraine, we now have a western world that’s grappling with its dependence on this source of fuel and is looking to procure western sources of enrichment, conversion, uranium and, of course, western sources of fabricated fuel,” Gitzel said.
Experts say energy, minerals and agriculture loom large in the motivation behind Russian President Vladimir Putin’s actions in Ukraine and the ensuing war has left global markets with dropping supplies and skyrocketing prices.
Saskatchewan, with its stable and established resource and agriculture sector, has found itself in a position to help fill the global gap caused by the war.
“(The Prairies) are big players in global markets for these things,” said Ellen Goddard, an agricultural economist and professor emeritus at the University of Alberta.
“For the majority of Canadians, the actual contribution that the Canadian Prairies make to global markets is not very well understood at the best of times.”
Saskatchewan, with a population of under 1.2 million people, is known to produce a lot of National Hockey League players, but it does not have a reputation in Canada as a global power player. However, the decisions taking place in its boardrooms are having a significant impact, especially as the war in Ukraine rages on.
In addition to the global role of Cameco, the province is also home to fertilizer producer Nutrien. As the largest producer of potash in the world and third-largest of nitrogen, Nutrien is driving up output to respond to the war.
Earlier this year Russia and Belarus potash shipments dropped significantly due to sanctions and restrictions on financing activities. Around the same time, Nutrien announced plans to increase potash output to 18 million tonnes per year by 2025 to meet increasing global demand, marking a 40 per cent increase over 2020 levels.
The fertilizer giant surged to all-time high profits in the first six months of the year, raking in US$5 billion as crop input prices soared to multi-year highs driven by the war and heightened global food-security fears.
Interim CEO Ken Seitz told analysts in August that the company expected ripple effects of the war would drive demand for many years.
“We believe structural changes to global energy, agriculture and fertilizer markets will provide a support environment for Nutrien well beyond 2022,” Seitz said.
David Soberman, a professor at the University of Toronto and Canadian national chair in strategic marketing, said Saskatchewan has suffered in the past when there has been a surplus of resources coming from eastern Europe. For instance, prices languished for years following the 2013 breakup of a Russian-Belarusian marketing cartel that brought more potash competition to the market.
But Saskatchewan’s companies remained stable throughout those times, Soberman said, assuring the global market that they are dependable, especially in a time of uncertainty.
“The world needs the things that the Prairies are producing so in many ways,” Soberman said. “The Prairies are like a saviour for the world.”
The war in Ukraine is terrible, he said, but the uncertainty it brings can also emphasize the attractiveness of dealing with Canadian companies.
Grain stocks and prices have also been upended after exports from Ukraine were stopped. The first ship carrying grainsince Russia invaded in February only left a Ukrainian port in August. While more grain was scheduled to ship out of Odesa, the unpredictability of war remains.
Russia and Ukraine were both some of the world’s top producers and exporters of grain and cooking oil. In the years before the war, Canada’s share of the global export market had been shrinking amid the increased exports from Black Sea producers, including Russia and Ukraine.
The Canadian Prairies can also play a role as a stable provider of grains and oils, said Joel Bruneau, the department head of economics at the University of Saskatchewan.
Bruneau said Saskatchewan producers must act ethically when responding to increased demand caused by war. If the companies start to price gouge, that won’t soon be forgotten by partners globally, he said.
“We are a good supplier,” Bruneau said.
“So, we are getting the profits out of being a good supplier.”
— With files from Amanda Stephenson in Calgary
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