By P.K.Balachandran/Sunday Observer
Colombo, February 8 – Canada is to sell India uranium worth US$ 2 billion (C$ 2.8 billion) over the next years. The deal is expected to be inked when the Canadian Prime Minister Mark Carney and his Indian counterpart Narendra Modi meet in New Delhi in the first week of March.
Reuters reported on January 26 that Mark Carney will likely visit India to sign deals on uranium, energy, minerals, education and artificial intelligence.
Canada is the world’s second-largest producer of uranium, accounting for 13% to 15% of global output, while India is the world’s third-largest consumer of energy, according to the International Energy Agency.
Given its burgeoning economy, India is on a quest for secure uranium supplies as it expands its nuclear power footprint tenfold to 100 gigawatts by 2047.
At the heart of the supply deal is Canada’s Cameco Corporation, the world’s largest publicly traded uranium company, based in Saskatchewan. The company is the majority owner of Cigar Lake, the world’s highest-grade uranium mine located in northern Saskatchewan. The mine has been operational since 2014.
A spokesperson for India’s Department of Atomic Energy told Forbes that the value of a potential 10-year deal would be “in the region of US$ 3 billion.” However, Cameco said it would announce the rate at the appropriate time.
Canada has the highest quality, purest concentration of uranium of any country in the world and has historically supplied uranium to India. There is a nuclear cooperation agreement between Canada and India that came into force in September 2013.
According to the Canadian government, there is a contract to supply 7.1 million pounds of uranium concentrate (about 2730 tU) to India’s Department of Atomic Energy.
India currently has 21 nuclear power reactors in operation, with another six under construction and scheduled to start up over the next four years. The country plans to increase its nuclear generating capacity from the current 5800 MWe to 27,500 MWe by 2032.
Political Rationale
Carney is making all-out efforts to diversify Canada’s alliances beyond the US, its top trade partner as on date. In Davos last week, Carney earned a rare standing ovation for saying that the old rules-based order is over and called on middle powers like Canada to build fresh coalitions to shape a fairer, more resilient world.
His speech followed an agreement with China to slash Canadian tariffs on electric vehicles and other goods. US President Donald Trump reacted violently to Carney’s moves vis-à-vis China and warned him that if he went ahead with the China deal, China will swallow Canada. He alleged that Canada is planning to redirect Chinese products to the US.
Trump then threatened a 100% tariff on Canada and to annexe Canada and make it the 51 st. State of the US. Canada, he claimed, had no logical reason to be a separate country.
The uranium deal with India is part of Canada’s new quest. In the meanwhile, Canada and India, which were at daggers drawn in 2023, have buried the hatchet. Carney’s predecessor, Justin Trudeau, had accused the Indian government of involvement in the killing of a Sikh separatist leader in 2023. India denied those claims. The two countries all but broke off diplomatic ties over the killing. Now Carney has met with Modi.
Prime Minister Narendra Modi attended the Group of 7 summit on Carney’s invitation in 2025 and several of Carney’s ministers have travelled to India. Formal negotiations for a Comprehensive Economic Partnership Agreement (CEPA) with India should also start in March, High Commissioner in Canada Dinesh Patnaik said. The countries had agreed to restart stalled trade talks in November 2025.
Uranium or Thorium?
India, a nation with a burgeoning population and an ever-increasing demand for energy, stands at a critical juncture in its nuclear energy policy. The country faces a dilemma as to which fuel it should use in its nuclear paths, thorium or uranium. The choice between thorium and uranium will determine the trajectory of this expansion.
Uranium has been the traditional fuel for nuclear reactors worldwide, including in India. But India has limited domestic uranium reserves, necessitating imports. Uranium-based reactors are well-established, with proven technology and operational experience. But uranium reactors produce a high-level radioactive waste.
Thorium is a promising alternative. India possesses one of the world’s largest thorium reserves, estimated at around 360,000 tonnes. Thorium reactors are considered safer, with a lower risk of meltdown and less production of long-lived radioactive waste.
Thorium can be used in breeder reactors, which can produce more fuel than they consume.
With abundant thorium reserves, India can achieve greater energy security and reduce its reliance on imported uranium. But despite its advantages, thorium faces several challenges that need to be addressed. Thorium reactors require advanced technology. India has made significant progress in this area, with the commissioning of the Kalpakkam Prototype Fast Breeder Reactor (PFBR) in 2021. But further research and development are needed to commercialise thorium-based nuclear power.
The initial investment required for thorium reactors is higher than for conventional uranium reactors. However, the long-term benefits, including reduced waste management costs and enhanced energy security, could offset these initial expenses.
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