UPDATE 1-Canada's Cameco begins uranium sales to China
* Cameco, CNNC unit have deal for 23 mln lbs by 2020 * Cameco shares down in afternoon trading By Rod Nickel March 13 (Reuters) - Canada's Cameco Corp has begun shipping uranium concentrate to China, the company said, tapping into what could become a lucrative market for years to come. Saskatchewan-based Cameco signed an agreement in 2010 to supply China Nuclear Energy Industry Corp, a unit of China National Nuclear Corp, with 23 million pounds of uranium concentrate through 2020. The same year, it also signed a deal to supply China Guangdong Nuclear Power Holding Co Ltd with 29 million pounds of uranium concentrate through 2025. Cameco has made shipments under both deals, with more deliveries to come later this year, company spokesman Rob Gereghty said on Wednesday. Saskatchewan Premier Brad Wall told reporters on Tuesday the Canadian and Chinese governments have an agreement on nuclear cooperation. That pact ensures monitoring to verify that Canadian uranium is used for civilian purposes, such as generating power. "Basically, every hurdle has been cleared," Wall said, in comments to reporters that were recorded by his office. The uranium deal with CNNC is worth C$1 billion ($971 million) at current prices, and could lead to mine expansions in Saskatchewan, Wall said. Prior to the most recent supply deals, Cameco has delivered to China uranium hexafluoride (UF6), a chemical compound of uranium, and finished fuel bundles, Gereghty said. The company's shares were down nearly 2 percent in afternoon trading in New York and Toronto. CNNC is China's largest generator of nuclear power, while Canada is the world's second-biggest uranium producer, after Kazakhstan. A CNNC delegation visited Saskatchewan on Tuesday. Wall said uranium mining will be a theme in Saskatchewan's 2013-14 budget, which his Saskatchewan Party government will unveil next Wednesday.
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