Cameco uranium mine stops production after union rejects offer

By Rod Nickel

Aug 29 (Reuters) - Canadian miner Cameco Corp suspended production at the world's largest uranium mine after the union representing more than 500 workers refused to take the company's offer to workers for a vote, Cameco said on Friday.

The company said in a statement it made its "final offer" to the union on Thursday and asked that workers vote on it. The union's bargaining committee rejected the offer and declined to put it to a vote among members, Cameco said.

The company began flying workers at the remote McArthur River, Saskatchewan, mine to their home communities on Friday evening. No further talks with United Steelworkers union Local 8914 are scheduled, said Cameco spokesman Gord Struthers.

Union representative Mike Pulak did not respond to requests for comment.

Saskatoon, Saskatchewan-based Cameco said on Wednesday that, barring a last-minute labor settlement with 535 unionized workers, it would close the mine and Key Lake mill and lock out workers at 12:01 a.m. Central time (0501 GMT) on Saturday.

The move was in response to United Steelworkers issuing a strike notice for the same time.

The shutdown will reduce some of the world's excess uranium supply but likely crimp earnings at Cameco, which analysts said may have to find other supplies at a higher cost.

The spot uranium price climbed to $33 per pound on Thursday, according to Ux Consulting, its highest level in four months.

Uranium spot prices had reached a nine-year low earlier this year, as Japan, previously a major producer of nuclear-fueled electricity, has been slow to approve reactor re-starts after an earthquake and tsunami destroyed the Fukushima Daiichi nuclear power station in 2011.

Cameco shares gained more than 1 percent in Toronto and New York on Friday. They were still down 3 percent since Cameco announced the planned shutdown early Wednesday.

France's Areva SA owns minority stakes in both the McArthur River mine and the Key Lake mill, which processes ore from McArthur.

Cameco was the world's second-largest uranium miner in 2013, tied with Areva and trailing Kazakhstan's KazAtomProm.

(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Paul Tait)