Cameco, Canada's major uranium producer, is capitalizing on demand for nuclear power to fuel AI and data center expansion.

Tim Gitzel is CEO of Saskatoon-based Cameco, the largest uranium miner in Canada and a leader among global uranium suppliers. But Gitzel believes Cameco's growth story is just beginning. Cameco is poised to expand alongside a civilian nuclear power sector that is booming worldwide.

There are about 80 nuclear reactors under construction around the world, and another 120 reactors are planned. There are about 440 existing nuclear power plants.

For U.S. reactors, much of that fuel comes from Canada, the largest supplier of uranium to the U.S. Uranium from Canada accounts for about one-quarter of total U.S. utilities' purchases. Domestic U.S. uranium production meets only five per cent of U.S. utilities' fuel demand. Gitzel chortles every time he hears U.S. President Donald Trump declare that the U.S. needs nothing from Canada.

Massive cost overruns at new nuclear plants have marred the comeback of civilian nuclear power. But RBC Economics noted in a March report on Canada's "atomic advantage" that "several of Canada's nuclear reactors have been successfully refurbished ahead of schedule and under budget, bucking the cost overrun trend of nuclear projects in other Western countries. Simply put, Canada has an opportunity to play a key role in nuclear's resurgence."

Cameco is one of the world's few integrated nuclear power enterprises. At a time when security of supply chains has primacy in assessing economic strength, Cameco is a model of reliability. Cameco explores for uranium, mines it, and manufactures uranium products.

In Northern Saskatchewan's Athabasca Basin, Cameco owns and has part ownership of one of the world's largest reserves of high-grade uranium. The reserves are estimated at 433 million pounds.

Cameco also has a 49 per cent stake in Westinghouse Electric of Pittsburgh, Pennsylvania, one of the world's largest makers of nuclear reactors. Cameco partnered with Brookfield Renewable Partners, an affiliate of Toronto asset manager Brookfield, to buy Westinghouse in 2023 for $8.2 billion (U.S.). Brookfield holds a 51 per cent stake.

Cameco and Brookfield announced plans this year to take Westinghouse public. Valuations of the reactor maker range from $30 billion (U.S.) to $50 billion (U.S.). In an understatement, Gitzel has said of Westinghouse, once known for household appliances, that "We got the right company at the right time."

Westinghouse has a burgeoning order book. Over the next two decades, it has about 91 reactors under development or on order from utilities worldwide. That doesn't include a June announcement by the Trump administration that it will provide as much as $17.5 billion (U.S.) in loans to finance construction of 10 of Westinghouse's latest generation AP1000 nuclear reactors.

Westinghouse has rivals in reactor development, including Candu (Canada deuterium uranium), whose technology is owned by the federal government and is licensed to Montreal engineering firm AtkinsRéalis, and GE Vernova Hitachi Nuclear Energy, which has partnered with Ontario to develop small modular reactors (SMRs) at the Darlington Nuclear Generating Station.

But about half the world's nuclear reactor fleet is supported by Westinghouse technology—a source of recurring revenue for the company in fuel fabrication and maintenance services. Westinghouse is broadening its product lineup with its own SMRs and mini reactors under development for deployment in hospitals, office buildings, and power-hungry AI data centres that currently draw power from local utilities.

"We view Westinghouse as a unique asset with no direct publicly traded peer, which justifies a premium valuation," analyst Andrew Wong of RBC Capital Markets said.

Among Cameco's greatest advantages is strong financial performance. The company survived a rough decade in the 2010s when Russia glutted the world market with low-cost uranium in a successful bid to underprice Western uranium producers and drive them out of business. Russia's manipulation of the market, depressing uranium prices, forced Cameco to reduce production through mine closures and layoffs. In 2021, the company posted a loss of $103 million (Canadian).

But prices have since recovered with renewed interest in nuclear power. Cameco's profit more than tripled last year to $590 million, and revenues rose 13 per cent to $3.5 billion. Before factoring in its share of proceeds from a Westinghouse IPO, Cameco is already one of Canada's most valuable companies, with a market cap of $54 billion.

In a recent report, Orest Wowkodaw at Bank of Nova Scotia calculated that reactor sales and Cameco's increasing uranium production should yield a fivefold increase in free cash flow, to $1.3 billion in 2028.

That financial strength gives Cameco the ability to ride out future bouts of uranium price instability and the capital to expand its mining capacity without straining its balance sheet. Gitzel believes Cameco contributes to Canada's energy security and has played a role in the country's emergence as a "nuclear superpower."