Wednesday, 18 July, 2007

Sydney Morning Herald

ENERGY RESOURCES of Australia has delivered an improved production performance in the second quarter of 2007, but the outlook for the uranium miner remains bleak.

Output for the three months to June 30 from the Ranger mine in the Northern Territory increased to 1490 tonnes of yellowcake, compared with 596 tonnes in the corresponding period last year.

ERA attributed the performance, which was also an improvement on the 1006 tonnes produced in the first quarter of 2007, to the processing of high-grade ore stockpiled before the wet season.

"Overall performance in the second quarter of 2007 improved when compared with the same period last year, when wet weather associated with cyclone Monica and unusually high rainfall throughout the wet season prevented access to high-grade ore," ERA said.

The miner said production and sales deliveries for the balance of 2007 and 2008 would continue to be affected as a result of water levels in the open pit, following adverse weather earlier in the year. Cyclone George dumped 850 millimetres of rain over the Ranger mine in February, flooding the open pit and ceasing milling operations.

"Notwithstanding the second quarter production, ERA's sales contracts remain subject to force majeure as a result of flooding of the operational pit," ERA said.

The adverse weather forced ERA to forecast a loss of as much as $10 million in the first half.