By Joanne Paulson, SP Business Editor
Courtesy of the StarPhoenix
Originally published: 08/12/2000
Jerry Grandey was elected to the board and named president of Cameco Corp. in May, taking over the role from CEO and chair Bernard Michel. Here, in the second of two profiles on Cameco management, Grandey talks about his history in the uranium business, and how he views the future of the industry.
Jerry Grandey is only 54, but his is already a long story. The California-born president of Cameco Corp. has camped in the Russian hinterland, practised law, saved a U.S. uranium company, exploded landmines in Korea and learned the finer points of lobbying governments and environmental groups.
All that, and he still finds an hour most mornings to swim a couple of miles. Maybe that's where he gets the energy.
"That is my stress release, if you will," said Grandey in a recent interview. "I go down to the Y five days a week if I'm in town. If I'm travelling I try to find either a hotel pool or a local pool I can swim in."
Grandey tried swimming at lunchtime, but found he was always being called away to meetings. At five or six a.m., the only excuse for missing exercise is not being able to get out of bed, "and that's an intolerable excuse," says Grandey.
It's a telling comment from someone with the varied and unique background Grandey brought to Cameco when he joined the company in 1993 as senior vice-president of marketing and corporate development.
He left California after high school, to attend the Colorado School of Mines, where he enrolled in geology but discovered he preferred math and physics. He combined the three disciplines into a geophysical engineering degree, before deciding he really did not want to pursue that as a career, either.
Following a very brief stint at Procter and Gamble, Grandey joined the U.S. military during the Vietnam era. His hometown in California was "notorious for drafting everybody," so Grandey "volunteered" by joining ROTC, the officer training corps.
"I got sent to the demilitarized zone in Korea, where we were removing landmines that had been placed about two years earlier, and doing other engineering tasks," said Grandey, who completed his military commitment with a port construction company in Washington, D.C.
Grandey then went on to law school at Northwestern in Chicago, where he learned that engineering and law are very similar.
"I found law school extremely easy . . . because math and physics and engineering taught you to look at a problem in a certain way, dissect it into its components, try out solutions and then choose among the best alternatives. Law does very much the same thing.
"(Law and geophysics) has been a very nice combination to have, because you understand enough of the technical lingo that you can have an intelligent conversation—and you can figure out if people are telling you something accurate, or something not so accurate."
After law school, Grandey returned to Denver to join a law firm, where he quickly became a mining and environmental specialist. Only five years later, the senior partner in charge of mining left, leaving Grandey with his clients—some of them major North American mining companies, and others smaller, entrepreneurial companies.
One was Energy Fuels, a company that would shape Grandey's interest in the uranium industry.
Energy Fuels' founder, Bob Adams, asked Grandey to join the company as general counsel and to help him build a coal and uranium company. The price of uranium was going up, and Adams wanted to build a mill to serve the "mom-and-pop" uranium mines then prevalent in the U.S.
But Adams died suddenly just a few years later, leaving Grandey and Adams' son with $80 million in debt and no cash flow.
"We ultimately took Energy Fuels from that point to become the largest producer of uranium in the U.S.," said Grandey.
During those years, Grandey plunged into sensitive negotiations with environmental, government and nuclear agencies to have an Arizona mine approved, and learned the intricacies of effective lobbying.
Eventually, the family decided to sell the company, although Grandey promised to stay during a transition period. A year later, in 1993, Grandey decided to leave and within a couple of months, Cameco came calling with the vice-presidency offer.
Grandey, who did not want to leave the industry he had learned so well and enjoyed so much, accepted the offer.
"This was a perfect opportunity. I knew the assets Cameco had, and I knew how much better they were than anywhere else in the world."
Grandey said he had no trouble moving to Saskatchewan, where he found the attitude similar to that of the western United States. He moved to Saskatoon with his wife and two children—a daughter, now 21 and attending the University of Richmond in Virginia, and a son who just graduated from Aden Bowman and is headed for Ithaca College in New York to study journalism.
He also knew a number of people at the Saskatoon-based offic— but not its president and CEO, Bernard Michel.
"That was obviously one of the big unknowns. I have to say that relationship has worked out wonderfully well over the years," said Grandey.
"We've agreed on most directions. There's totally different styles of management, which I think have been complementary.
"I don't see, as this transition goes on, that there is going to be a dramatic change in the way Cameco is running, operating, growing, developing. This is an industry that is very tightly knit together—customers and producers.
"My own view when I came in 1993 was that Cameco can be and has become the largest producer of uranium in the world, and diversified. It has to do that in maintaining its reputation, from a standpoint of environmental protection and other issues that are sensitive from a societal perspective, as well as from a customer perspective.
"I think we've done a very good job of enhancing that image and maintaining it and I certainly don't intend to do anything different."
Among Grandey's accomplishments at Cameco was his deep involvement in the deal Cameco and two other western uranium companies signed last year to market highly enriched uranium (HEU) salvaged from Russian nuclear weapons. Grandey brought his own secret business weapon, Fletcher Newton, to the talks.
"I had the benefit of a lawyer in Colorado that worked for me in my days with Energy Fuels who got a degree from Harvard in the Russian language, and then got a law degree. He is so fluent that even the Russians do not know that he's not Russian."
While with Energy Fuels, Grandey and Newton travelled extensively in Russia, camping in the wilds and visiting uranium mining regions.
"I had used him extensively in my previous dealings with the Russians. As Cameco stepped into many of the Russian activities—particularly with respect to weapons dismantling—immediately turned to him to be a consultant.
"Over the years I've maintained that relationship and ultimately I hired him as a lawyer for our U.S. subsidiary."
Newton, now president of the U.S. subsidiary, was critical to the talks, says Grandey.
"The other side understands whatever they say is going to be understood, and you can be sure that what you say in English (will be understood). That is the hardest part of any negotiation in a foreign language."
The negotiations turned out better than Grandey had anticipated. Cameco ended up with the ability to represent the material and control the sale of HEU, without taking a large financial risk.
"It was a lot of fun. Lots of frustration, but what I would describe as your multi-dimensional Chinese chess game. You had governments, you had the other western companies, you had the Russian commercial side, you had what I would describe as the financial influence over the Russian government trying to make sure cash would flow through the banks."
But more important than anything else is dismantling weapons and using uranium for peaceful purposes, said Grandey.
He is also convinced that the price of uranium will improve. "If every producer save Cameco loses money at $8 a pound, how can it ever stay at $8 a pound? You know that the day of reckoning is coming.
"The longer it stays low, where people are not investing in exploration, and they're not investing in bringing on new mines because they haven't found any since 1988 (Cameco's McArthur River), then the greater the crisis will be when you finally run out of the inventories that are keeping the price down. You can't bring on a uranium mine tomorrow.
"We're not going to run out of uranium by any means, but the price is going to have to be sufficiently high to cause people's behaviour in terms of development to change."
