Wednesday, 18 July, 2007

by Ben Sharples
The Herald Sun

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.

While the second quarter was better than the first, ERA said production and deliveries for the balance of 2007 and 2008 would continue to be affected by water levels in the open pit of the Ranger uranium mine in the Northern Territory.

Cyclone George dumped 850mm of rain over the mine in February, flooding the open pit and temporarily halting milling operations.

ERA was not the only company to be affected by the weather, with crane and lift company Boom Logistics saying its full-year result for 2006-07 would be affected by heavy rain, high winds and flooding along the east coast of Australia.

Boom expects a full-year net operating profit of $36 million to $37 million for the year ended June 30, 2007.

Extreme weather conditions over the past five months had caused unplanned outages, Boom said, delaying planned maintenance activities by many of its customers.

ERA said output for the three months to June 30 from the Ranger mine rose to 1490 tonnes of yellowcake, compared with 596 tonnes in the same period last year.

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

ERA's exposure to the buoyant uranium spot price is constrained by long-term contracts.

UBS analysts expect the spot price, now about $US133 a pound, to reach $US200 a pound in 2008.

Shares in ERA, which is 68.4 per cent owned by Rio Tinto, fell 61 to $20.10. Shares in Boom lost 33 to $3.15.