Friday, 28 September, 2007

by Rebecca LeMay
The Herald Sun

RIO Tinto subsidiary Energy Resources of Australia has extended mining at its Ranger uranium mine in the Northern Territory until 2012.

It has also raised the mine's production outlook.

ERA said yesterday the extension was expected to cost about $57 million, largely for extra mining equipment and associated infrastructure, and would create 45 new jobs.

The mine presently employs more than 350 permanent employees.

ERA said the extension was subject to normal regulatory approvals.

Preliminary mining has already been given the nod by the Ranger Mine Site Technical Committee, which comprises representatives of the NT Government, Federal Government and local Aboriginal groups.

The company said most of the additional production from the extension would occur in 2011, with processing at Ranger to cease in 2020.

"The pit pushback will extend mining at Ranger until 2012 and, combined with optimisation of the existing pit, will add 4857 tonnes of contained uranium oxide," ERA said.

ERA said it would also spend $10 million on a pre-feasibility study to examine options to extend the mine further and increase production from the processing plant.

The study will start immediately and continue next year.

The mine was hit by exceptionally heavy monsoonal rain in February from Cyclone George. Mining ceased for nine days.

ERA declared a force majeure on its sales contracts -- a clause that excludes a party from liability or obligation when affected by an extraordinary event.

ERA said it had been successful in implementing several mitigation strategies following the heavy rainfall. It now expects to rid the pit of water by November.

In July, ERA posted a 71 per cent dip in net profit to $5.7 million for the half-year to June compared with $19.9 million for the previous corresponding period.

The amount of uranium oxide sold during the half-year to June fell 31 per cent to 2200 tonnes.

Ranger opened in 1980 but full-scale mining began in 1997.

ERA provides 11 per cent of the world's uranium production.

ERA shares closed $1.13, or 6.52 per cent, higher at $18.45.