The Great Uranium Cartel

William T. Perks was Professor of Urbanism and Planning, Faculty of Environmental Design, University of Calgary.

Summer 1983, an international conference announces that the uranium industry faces an “uncertain future.” Low prices, worldwide recession, and cuts in nuclear power plans are the problems. World production will exceed demand for another 20 years. The late 1950s also saw a glut, with Canada being the “hardest hit” of all producer countries. The United States and Britain announced they would not be buying any more from Canada; half of the country’s uranium miners would be out of work. In 1963 the United States put an embargo on foreign uranium. By 1971 the United States had stockpiled 50,000 tons, the “rest-of-the-world” price had fallen to a level, not only immediately distasteful in the corporate boardrooms of Rio Tinto, Eldorado, and others, but threatening for the future of the industry.

So the stage was set for French, British, South African, and Canadian interests to form a uranium producers’ cartel.

High-powered international conspiracy though it was, this cartel turned into something of a comic opera in its performance, a source of amusement to the American outsiders. All six Canadian producers joined the club under the leadership and “persuasion” of the federal cabinet. The Canadian participation turned around an evasion of our own competition laws (such as they are!) and concealment from the public. At least one company (Gulf Mineral Resources) had to be coerced into joining.

Earle Gray is a seasoned journalist and expert analyst of the energy industry. His uranium narrative weaves its way dispassionately through Canada’s shadowy predicament in law, trade, and domestic employment politics with abundantly detailed documentation and an occasional lash of mirth or irony. The whole episode is a rather grubby one. Still, Gray’s story is fascinating for its cameo portraits of the actors (politicians, businessmen, senior bureaucrats), for its factual and political analysis, and for a revealing account of the life cycles of uranium exploration, fortune hunting, and international marketing.

Cartel divides nicely into a three-part sequence. The first is a brief history of uranium, from the time in 1912 when Czechoslovakian ore sold for $6 million an ounce (!) through to the early ‘70s when it could be had for a worrisome three or four dollars a pound. The pre-cartel narrative also introduces the main players, such as Rothschilde and Oppenheimer, and Hirschorn, Joubin, and Roman, three colourful Canadians who made it. A middle part tells of forming the cartel in 1972, with all of its secretive events, the adventurism of some, the furtive manipulations of others. But what a club! Members deceive each other. The Canadian producers can’t agree on how to divvy up their share. The most reluctant member, Gulf, complains of “Star Chamber” proceedings by the dominant players. And meanwhile, market prices climb anyway, turning the cartel into an impotent, even farcical arrangement. In less than four years its effective purpose is exhausted. The third part deals with lawsuits brought in the United States for price-fixing. In 1981 a storm is blown up in Parliament by Opposition demands to have the truths revealed about Canadian transgressions. “The government was clearly in a bind” — risk covering up their role in the cartel or prosecute the offending (and embarrassingly “fellow”) club members. Gray’s excellent exposition of the uranium cartel ends up reading like a morality play as well as an enjoyably interesting documentary history.