Rain takes toll on energy resources of Australia output

Published in The Age, June 2010 by Rebecca LeMay

Energy Resources of Australia (ERA) has flagged a drop in uranium oxide production of up to 18 per cent a year after its first-half output slumped, due largely to record rainfall affecting operations.

Shares in ERA closed 68c, or 4.62 per cent, lower at $14.05.

The world's fourth-largest uranium miner yesterday said it expected its Ranger mine in the Northern Territory to produce 4300-4700 tonnes of uranium oxide this year, down from 5240 tonnes last year. The Darwin-based company, which is 68 per cent owned by Rio Tinto, had previously expected production this year to be similar to last year's.

ERA produced 1717 tonnes of uranium oxide in the six months to June, down 36 per cent on the previous corresponding period.

The company said access to higher-grade ore in the lower levels of the open pit had been reduced, due mainly to instability on one of the pit walls and record rainfall at the mine in April.

"We did get a surprise with just how much water we had in the open pit," said chief executive Rob Atkinson. "The pit is now dry and we're resuming normal mining."

Janine Cox, investment analyst with broker Wealth Within, said uranium would continue to be soft until the global recovery was convincingly under way.