https://financialpost.com/commoditi...player-to-watch-in-the-energy-security-crisis
A man called 'Gitty': Saskatchewan CEO is a global nuclear power player
How did a guy who grew up playing road hockey in this prairie province end up being on the board of the World Nuclear Association? Joe O'Connor has the story
Author of the article:
Joe O'Connor
Published Apr 14, 2022 • Last updated Apr 21, 2022 • 10 minute read
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Tim Gitzel is the chief executive of Saskatoon-based global uranium mining giant Cameco Corp. Photo by Matt Smith/Saskatoon StarPhoenix/Postmedia
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Tim Leier’s phone lit up at 6:19 a.m. on April 1. It was “Gitty” texting him from the Prague airport to let him know he would do his best to get to Leier’s cottage on Emma Lake north of Saskatoon the following evening. They had been planning a get-together of old hockey buddies who have been running around as a pack ever since they met at North Battleford Comprehensive High School 45 years go.
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Gitty, also known as Gitzy, is Tim Gitzel, the chief executive of Saskatoon-based global uranium mining giant Cameco Corp. Leier describes his friend as a “heart and soul” hockey player. A team guy, in other words, who always wore an assistant captain’s letter, and who could also “chuck the knuckles” when required, which was clearly the case with the Battleford Barons in 1979-80 as Gitty racked up 147 penalty minutes.
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“Those are the best buddies in the world,” Gitzel said of his hockey mates during an interview from Saskatoon. “It is two worlds I live in: that one, and my daily gig.”
Tim Gitzel, seen with his beer league hockey team (front row, “A” on sweater), the Stars. “Those guys are my reality check,” he says of his hockey buddies, many of whom he has known for 45 years. Photo by Submitted
That daily gig recently involved being part of a United States trade mission to Prague, led by U.S. deputy secretary of energy, David Turk. Cameco’s uranium mining assets in northern Saskatchewan are the richest on the planet, but it also has operations, currently idle, in Nebraska and Wyoming, and has long been a key uranium supplier to the U.S.
The invasion of Ukraine has elevated all those holdings as the world tries to find short- and long-term energy sources to replace those from Russia. Countries are picking sides, and shopping for energy partners that aren’t going to bomb them. This is where Gitzel, and the uranium miner and fuel maker he runs in safe and secure Saskatoon, becomes a power player to watch.
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“I don’t know whether Canadians fully understand how important those uranium resources in northern Saskatchewan are,” said Scott Melbye, a second-generation American uranium miner, executive vice-president of Texas-based Uranium Energy Corp., and, once upon a time, a colleague of Gitzel’s at Cameco.
Case in point: Republican lawmakers in March introduced a bill calling for a U.S. ban on Russian uranium imports. Lumped with uranium from Russia-friendly Uzbekistan and Kazakhstan, those imports constitute almost 50 per cent of the U.S.’s supply.
Czechia, meanwhile, is building new reactors, and barred Russia and China from bidding on the job. Poland, Bulgaria, Slovakia, Slovenia and Ukraine are all taking stock of their existing and proposed nuclear energy options, and they are not speed-dialling the Kremlin asking for help either.
A premium is going to be placed on strategically, geopolitically stable uranium production, and that really favours North America, U.S. and Canadian mines
Scott Melbye, executive vice-president of Uranium Energy Corp.
Secure energy supplies, economic sanctions and the West weaning itself from its dependence on Russian oil, natural gas, coal and uranium have become central to the political dialogue around Washington and the capitals of Europe.
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Melbye was part of the trade delegation to Prague, and has testified before the U.S. Senate that America’s nuclear dependence on Russia and its de facto allies are an “urgent threat” to national security.
“The biggest takeaway from the Ukraine invasion is that a premium is going to be placed on strategically, geopolitically stable uranium production, and that really favours North America, U.S. and Canadian mines … that are not under control of China or Russia,” he said.
Who better to step into that void than Cameco, which accounted for nine per cent of the world’s uranium production in 2021, according to company documents, and has the capacity to produce more. Kazakhstan, wedged as it is between Russia and China, produced 41 per cent of the world’s uranium, but it also relied upon Russian troops to help quell civil unrest in the capital city in January, just in case it’s unclear whose sphere of influence the country is in.
Located in northern Saskatchewan, Cigar Lake is the world’s largest high-grade uranium mine, says Cameco. Photo by Cameco Corporation
Cameco’s production in 2021 came with its mines operating at 75 per cent below capacity, a move designed to preserve precious assets amid depressed global uranium prices and COVID-19-related economic shutdowns.
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Uranium prices that were meandering along at around US$27 a pound in March 2020 are now sitting at US$58. COVID-19 fears are waning, and new reactors are getting built, with 52 under construction worldwide, according to the International Atomic Energy Agency, and 439 already humming along, providing about 10 per cent of the world’s electricity. This, as Russia, a major uranium producer and exporter of nuclear fuel and technology, cements its reputation as a belligerent pariah state.
“I keep going to bed at night and thinking, I will get up in the morning and things will be back, the war will be over, but it is not,” Gitzel said. “The world is transformed.”
It’s a long way from the world Gitzel grew up in, playing road hockey in northern Saskatchewan and dreaming the Toronto Maple Leafs would eventually recognize his talents and give him a call. His father, Clare, was an RCMP sergeant. He taught his son integrity, discipline, loyalty.
“My dad got up every morning and polished his shoes,” he said.
Clare Gitzel coached hockey. He curled. He talked to people. Gitzel’s mom, Maureen, sold pies at the rink. Community involvement was ingrained in the family’s routine. After 30 years in policing, the elder Gitzel retired to a second career as a human-resources manager for a mining company.
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Reflecting upon his own career arc, Gitzel expresses a sense of disbelief at the journey. How a twist, such as his father getting a job in HR, followed by an even bigger twist, his father getting his teenage son a summer job at the French-owned Cluff Lake uranium mine, set him on the path to the chief executive’s chair at Cameco.
One of the perks for the lowly summer student at Cluff Lake was meeting the French boss at the mine’s airport and touring him around the area in a Chevy Suburban. Bernard Michel was Parisian, but he liked to hunt and fish, and he liked to talk, which he did at length with his young chauffeur.
“For a 17-year-old summer student, to get to talk to the CEO, it really meant something to me, and I said to myself, ‘I want to be him,’” Gitzel recalled.
He wasn’t kidding. He studied French at the University of Saskatchewan before doing a year of full immersion at the University of Laval in Quebec. His hockey buddies were puzzled.
“Who takes French?” Leier said.
Michel evidently kept tabs on the kid he had met at Cluff Lake, and later offered him summer jobs with the company in France. Gitzel would get a law degree at Saskatchewan, and take a twirl as a practicing lawyer, before moving to Paris to work for Areva SA, a nuclear power company, after his mentor moved into the chief executive role at, you guessed it, Cameco.
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“Bernard made my career,” Gitzel said of Michel’s influence.
The now octogenarian Frenchman lives in Montreal, but he still sends handwritten notes to his former protégé, who joined Cameco as a senior vice-president and chief operating officer in 2007.
Gitzel keeps one on his desk in Saskatoon. A loose translation reads: “Hang in there, Tim, I know you guys have been through a tough time.”
Some tough times, indeed, and some bad timing in general. Gitzel moved home to Saskatoon 15 years ago. Cameco had been on a roll. Uranium prices were peaking at US$140 per pound, and they remained robust until a tsunami washed over Japan on March 11, 2011, knocking out the power source — and back-up power source — at the Fukushima nuclear plant.
Three reactor cores exploded, releasing clouds of radioactivity. It was an apocalyptic disaster. Japan responded by taking all 50 of its reactors offline. Nuclear power went from being hot to being, well, radioactive and not in a good way. But the miners kept mining. Uranium flooded the market. Commodity prices tanked, and on July 1, 2011, Gitzel became Cameco’s chief executive.
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“Most uranium companies lost 90 per cent of their value,” David Talbot, a uranium analyst at Red Cloud Securities, said.
One of the things Cameco had going for it was the new boss. Gitzel knew exactly what the company had in its McArthur River, Cigar Lake and Rabbit Lake mines, as well as its Key Lake mill. As Talbot points out, the deposits in Saskatchewan’s north are by “order of magnitude richer” than anywhere else.
Instead of digging them up, Gitzel kept a good chunk of them in the ground and bought uranium off the global market — at the depressed price — to meet the company’s reactor fuel commitments. He also undertook gut-wrenching layoffs in 2016-17, tossing hundreds off the job, calling meetings at the McArthur River gym to deliver the bad news in person. His father taught him that you don’t send someone else to do a job that you are not prepared to do yourself.
Concentrated uranium, known as yellowcake, is packaged into special drums at one of Cameco Corp.’s uranium mines in Saskatchewan. Photo by Cameco Corp.
“I looked around that room and those are my friends, I grew up with them, I worked with them at one mine site or another, and I know they have families,” he said.
It was a tough blow for the workers to absorb, but they appreciated the way the message was delivered, said Susan Daigneault, an electrician at Cameco and president of McArthur River’s union local. She has known Gitzel — she refers to him as Tim, while he’s generally known around the mines as Gitzel — for 25 years. She describes his approach as “refreshing.”
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For instance, he did not sit in an office while visiting the McArthur River mine when it was operational, but could be found out in the field talking to employees. He knew them by name. He’s personable, friendly and knew what it had meant to him when Bernard Michel took the time to talk to him decades before.
“People understood the reasoning for the layoffs,” Daigneault said. “They weren’t getting this news second-hand — it came right from the person at the top — and we couldn’t imagine being in Tim’s shoes delivering that news.”
The news has been better lately. Cameco is restarting its McArthur River operation. The company is hiring again.
“There is a lot of excitement,” Daigneault said.
Gitzel, in vintage, old-hockey-player-speak, said he tries not to get “too high” in the good times or too “low” in the bad. The thing is, there has been a slew of bad ever since he took over three months after Fukushima
.
“I just had this burning desire, need, I don’t know, a sense of responsibility, that we had to pull it back together and keep the company going through the tough times,” he said. “And I am not leaving until we get it back on a good path, and I felt I owed that to the people who are with us and who we let go in this province.”
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Great mining companies are defined by what they do in the down times, Melbye said. If that sounds counterintuitive, understand that choking off the Canadian uranium supply helped rebalance a global market flooded by the metal, which was driving prices down. Prices are now headed back up, and the assets that were too valuable to be dug up are about to be put back in play.
“Tim was dealt a bad hand, but the leadership of shutting those mines was critically important,” Melbye said.
Cameco’s Cigar Lake uranium mine. The deposits in Saskatchewan’s north are by “order of magnitude richer” than anywhere else. Photo by Cameco Corp.
New reactors are also getting built around the world, something that may accelerate if nuclear becomes seen as a viable option to dependence on Russian oil and gas, and a real solution to decarbonizing the economy. Older reactors are being refurbished, including in Ontario, where a massive, multi-billion-dollar reactor life-extension program is currently underway at Bruce Power, which, incidentally, is powered by fuel from Cameco.
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Ontario is a made-in-Canada energy security success story. Sixty per cent of the energy supply for the country’s most populous, most productive province is derived from nuclear power, and that starts with uranium mined in Saskatchewan. It is an example of what could be elsewhere, and Gitzel plans to take that story with him to Washington after Easter, where he plans to meet with senior Republican senators.
“I have been a big promoter of a North American solution to the nuclear issue,” Gitzel said. “The U.S. has almost 100 reactors, we have got uranium, we have got conversion, and so working together we are stronger, and if there is anyone you would want to work with, it is probably your neighbour.”
That’s the team guy talking, and Gitzel understands how important it is to stand shoulder to shoulder with your buddies. After rolling into town from Prague on April 1, he drove north on Highway 2 to Tim Leier’s place on Emma Lake for a Saturday steak dinner. He pulled into the driveway in his 2016 black pickup truck and took a seat at the table where the old friends told old stories until 2 a.m.
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The next morning, he was up and gone, checking his itinerary for wherever he was headed next.
“Those guys are my reality, my soundcheck,” Gitzel said. “Most days, I am flitting around the world with people, and I have to pinch myself, and say, ‘How did a guy who grew up playing road hockey in northern Saskatchewan end up being on the board of the World Nuclear Association?’”
From chucking his knuckles to a spot on the energy power play, Gitzel is priming Cameco for a winning streak after a decade of bleak times.
• Email: [email protected] | Twitter: oconnorwrites
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