As rebut to Bloomberg headline Cameco CEO * Says nuclear...

As rebut to Bloomberg headline Cameco CEO * Says nuclear renaissance still on track

Could Japanese incidents have been because [support systems at power plants are not built to the same seismic standards as reactors are.]

UPDATE 2-Cameco stock slumps, company seeks to calm fears
5:36 pm ET 03/14/2011- Reuters

* CEO says no significant effects of business from quake

* Says nuclear renaissance still on track

* Cameco closes down 12.72 pct at $31.70 on TSX

* Uranium One closes down 25.3 percent at C$4.45

(Releads, adds comments from CEO)

By Julie Gordon and Euan Rocha

TORONTO, March 14 (Reuters) - Cameco stock slumped over 12 percent on Monday on fears that Japan's nuclear problems could end the sector's so-called renaissance, but the company insisted that any impact would not last.

"We do not anticipate significant direct effects on Cameco's business in the short or long term," Cameco chief executive Jerry Grandey said on a conference call.

"We will continue to pursue our 'Double U' strategy to increase our uranium production."

Cameco plans to double uranium production by 2018. It will sell up to 33 million pounds of uranium in 2011, of which 10-12 percent is contracted to Japan. Over the longer term, the company aims to sell 18-20 percent of its uranium to Japan.

But the damage to reactors at Japanese nuclear plants has raised concerns about future of the sector in Japan, where nuclear power accounted for about a third of energy generation before Friday's earthquake, the strongest to ever hit Japan.

Japan has closed 11 of its 54 reactors since the quake. Dahlman Rose analyst Anthony Young said in a note to clients that the affected reactors consume about 340,000 pounds of uranium a month.

Shares of Cameco fell as much as 22.6 percent to C$28.09 before climbing back to close at C$31.70. More than 13 million shares changed hands, around six times the normal volume.

Shares in other companies associated with the nuclear power sector also fell.

TD analyst Greg Barnes said that in the worst case scenario, if Cameco lost 10 percent of sales, it would translate to a 21 percent drop in earnings per share.

He slashed his price target on shares of Cameco to C$42 from C$51, still way above current levels.

Grandey noted that much of Cameco's sales are tied up in long-term contracts, and that protects the uranium producer from sharp jumps in the spot market.

"Some people have questioned whether the nuclear renaissance will survive this natural disaster," he said. "Growth in nuclear capacity in China, India, Korea and elsewhere ... adds tremendous momentum and we expect it will continue."

Spot uranium prices have risen over 50 percent since July, peaking earlier this year above $70 a pound.

BMO Capital Markets mining analyst Edward Sterck said he expects uranium to average $60 a pound in 2011, but prices could fall below that this week. "It looks as though the only buying interest at the moment is in the high $50s," he said.

Shares of Uranium One , Canada's second largest uranium producer, closed down 27.68 percent at C$4.31 on the Toronto Stock Exchange.

Earlier Monday, shares of Energy Resources of Australia , a unit of global miner Rio Tinto fell 12.3 percent, while Paladin's shares fell 16.5 percent in Sydney.

Paladin's Toronto-listed shares closed down 21.24 percent at C$3.67. (Editing by Janet Guttsman)